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Trademarks are a form of intellectual property (IP) that identify and distinguish your products and services from others on the market. Trademark can come in the form of words, phrases, symbols or logos. Use of a trademark allows a brand to define itself and discourages unfair competition.
It’s important to note that violations against a trademark don’t just affect the trademark owner. Consumers are also hurt in these situations. Trademark infringement can confuse people who expect certain levels of quality in their purchases.
The Basics of Trademarks
Many people don’t realize it, but a trademark is protected as intellectual property even if it’s not registered with the U.S. Patent and Trademark Office (USPTO). By merely using a unique phrase, logo, or other form of trademark, you’re afforded certain protections under federal and state law. Of course, this doesn’t mean that you shouldn’t apply for a trademark.
Conduct a Trademark Search
The first step in acquiring a trademark is to do a trademark search. In fact, this may be the most important step in securing trademark rights. If you begin using a trademark that you don’t own, you will be exposed to claims of trademark infringement and may have to rebrand your entire company. Being forced to change your company name can be devastating especially if you are years into use.
We highly advise that you have an experienced trademark attorney perform the trademark search.
State Trademark Registration
While the USPTO is the national agency tasked with providing trademark protection, trademarks can also be filed on the state level.
If you are sure that you will never do business outside of your home state, and that your actions will never impact interstate commerce, then this may be your best option. Before making this move, however, make sure you understand that you won’t have nationwide protection which is likely to severely limit your rights in the future.
You should only bypass the benefits of national trademark registration if there’s a sound business strategy behind doing so. In almost every instance, federal protection is best.
Benefits of Federal Trademark Registration
A primary benefit of federally registering your trademark is the nationwide protection that it provides. It lets people know that the trademark is your property. In cases of malicious or willful trademark infringement, a registered trademark can lead to increased damages. In reality, a trademark registration prevents an infringer from claiming ignorance over the existence of the trademark.
If you’re still on the fence about whether to register your trademark, consider the benefits:
- Nationwide rights: Federal registration gives you nationwide rights even if your use is geographically limited.
- Blocks similar trademarks: Prevents other businesses or individuals from registering similar trademarks.
- Trademark symbol: Federal registration of your trademark allows use of the registered R symbol.
- International recognition: Trademark registration in America can serve as a basis for foreign trademark registration.
- Counterfeit protection: Registering your trademark federally allows U.S. Customs and Border Protection to block importation of infringing products.
These are just a few examples of how registering your trademark can benefit your brand and protect your hard work. However, not every trademark you may want to use can be trademarked.
Before Registering a Trademark
Prior to going through the registration process, it’s important to first ensure that your trademark qualifies as a trademark. The first two requirements from the USPTO, and thus the most important, are the following:
- You must be using, or legitimately plan on using, the trademark in a commerce setting.
- Your selected trademark must be distinctive enough to identify your business.
Using your trademark in commerce is an easily understandable concept. Being distinctive, on the other hand, is a little more complex. In reality, trademarked business names are often exactly the same. Here are a few examples:
- Pandora Music and Pandora Jewelry
- Delta Faucets, Delta Dental and Delta Airlines
- Morningstar Farms and Morningstar Investment Research
Trademark protection is typically industry based, and can also be geography based. Consumers aren’t likely to be confused between the Pandora that offers music services and the Pandora that sells jewelry because those are unrelated goods and services. Similarly, consumers may not be confused between local coffeehouses in New York City and Los Angeles even if they have the exact same name.
Companies like Sun Microsystems and Columbia Sportswear can even share strikingly similar logos. Since they’re not competitors, though, there will be no consumer confusion. As such, it is the likelihood of consumer confusion that is the definitive question in trademark issues ranging from registering trademarks to winning trademark lawsuits.
It’s also important to know the strength of the types of trademarks before filing a trademark application. All trademarks can be classified into one of five categories:
- Generic: It is not possible to register a generic trademark. For example the word furniture cannot be registered in relation to the sale of furniture.
- Descriptive: Trademarks can’t typically be merely descriptive. “Hot Pizza” for a pizzeria may fall into this category. If such a trademark takes on secondary meaning through publicity or long-term use, though, it may be registered. “Holiday Inn” literally means “vacation hotel,” but it’s acquired distinctiveness warrants a trademark.
- Suggestive: Trademarks that suggest particular characteristics or qualities of a brand can be registered as trademarks. This is a popular choice since consumers can easily relate these trademarks to the services that a company offers. The name of the digital company Netscape, for instance, brings to mind the “landscape” of the “internet.”
- Arbitrary: Unlike descriptive or suggestive trademarks, arbitrary trademarks have no relation to a company’s goods or services. This doesn’t mean, however, that consumers won’t directly link the trademark to a specific brand. Camel cigarettes, Shell gas stations and Apple computers have nothing to do with camels, seashells or apples. Once established, these can become very strong trademarks.
- Fanciful: Some individuals or companies take the time to create truly unique trademarks that function solely as a brand identifier. No other type of trademark is considered stronger. The corporate names Kodak, Exxon and Xerox all fall under the fanciful descriptor.
Whereas trademark dilution can occur solely due to the actions of an infringer, genericization rests on the failures of the trademark owner. A failure to police and enforce a trademark can minimize and even eliminate your trademark rights. Consider the following former trademarks:
- Trampoline: The creators of the first modern trampoline trademarked the term under the Griswold-Nissen Trampoline & Tumbling Company. It has since become generic.
- Dry Ice: The DryIce Corporation of America trademarked “Dry Ice” in 1925.
- Thermos: The company Thermos GmbH trademarked the thermos name, but after widespread use to mean a type of container it was declared generic in 1963.
In all these cases, patented ideas were represented by unique trademarks. Constant generic use and an inability or unwillingness to defend against this use led to genericization. Once this occurs, a company can no longer defend against what they perceive as trademark misuse.
Lego blocks, Adobe Photoshop and Xerox have all taken public measures to prevent the genericization of their brand names. In some instances, this took the form of nothing more than asking consumers to stop using the trademarks generically.
You should also know that a business’s trade name doesn’t always qualify as a trademark. Only trade names that are used for identifying goods and services fall under this umbrella.
Should I Hire a Trademark Attorney?
On first action, the USPTO accepted just 15 percent of trademark applications filed in 2018 based on filings per class. Perhaps for this reason the U.S. Patent and Trademark Office encourages applicants to hire a private attorney to handle this process.
A recent study shows that using a trademark attorney to file your trademark application makes you 50% more likely to get a trademark registered compared to those that go it alone. The study used 25 years’ worth of data in finding that trademark applications filed by a trademark attorney were approved 60% of the time, while trademark applications filed without a trademark attorney were only approved 42% of the time. If an Office Action issues, there is an even bigger disparity. Trademark applicants with a trademark attorney are 68% more likely to get a trademark registered than those without a trademark attorney when an Office Action issues.
Going through the process of trademark registration is an essential element of trademark protection. Unfortunately, it doesn’t guarantee that your trademark won’t be infringed upon. Whether a violation is willful or simply due to negligence, it’s likely you’ll encounter such a problem one day. A recent study by Compumark found that roughly 80% of businesses experience trademark infringements yearly. Most trademark infringement issues, whether you’re protecting your trademark or accused of infringing, relate to the likelihood of confusion.
What is a Likelihood of Confusion?
Whether you can register a trademark or not partially rests upon how likely it is to confuse a consumer. This is also a main consideration when it comes to trademark infringement. If you’re accused of a trademark violation or think someone else is misusing your trademark, you have to consider the likelihood of a consumer confusing one brand with the other.
There are several factors a court will consider when deciding on the likelihood of confusion.
The Likelihood of Confusion Test
If you are involved in a trademark infringement issue, your trademark attorney will consider the DuPont factors and the Sleekcraft factors to determine whether trademark infringement exists. In California, the Ninth Circuit uses the 8 Sleekcraft factors to determine a likelihood of confusion. The Sleekcraft factors are as follows:
- Strength of the trademark: Courts will decide the strength of a senior trademark – the trademark that was used or registered first – to determine its strength. Whether the trademark is descriptive, distinctive, arbitrary or fanciful plays into this analysis.
- Product relatedness: Are the goods or services at issue the same or related? This association between the goods and services is a prime consideration.
- Trademark similarity: This is often the most important factor. How similar are the two trademarks? Is the appearance, pronunciation or commercial impression similar?
- Does actual confusion exist: Actual evidence of consumer confusion is clearly the best evidence of trademark infringement.
- Marketing channel considerations: How do consumers encounter each product in the marketplace? Is the type of business similar? Are the same promotional practices being utilized? Courts will consider whether two products tend to be sold or shelved closely together in retail.
- Degree of care: This factor is based on how much care or time a consumer spends making purchasing decisions for these types of goods or services. Consumers tend to exercise more care in purchasing higher priced products which means that confusion is less likely.
- Intent of the accused: Courts will consider the alleged infringer’s intent in choosing the trademark. A valid non-infringing explanation is better than an admission that a similar trademark was purposely chosen. Knowledge of an existing trademark can also help to prove willful infringement.
- Expansion possibilities: Even if two brands aren’t competing, courts will consider if normal expansion of product lines could put them in direct competition.
See AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir.1979) and In re E. I. du Pont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (C.C.P.A. 1973)
Understanding these considerations will help you make a better decision when faced with instances of trademark infringement.
Utilizing a Trademark Watch
A trademark owner has a duty to police use of its trademark. A failure to police unauthorized uses of your trademark will lead to a loss of trademark rights. This puts a significant burden on every trademark owner. After all, a trademark infringement could take place on any level ranging from huge corporations infringing online to a small-town infringement that may be difficult to even know about.
This is why it is advisable to have your trademark attorney set up a trademark watch. A trademark watch will notify you immediately if a third-party files for a similar trademark. A google alert can also be set up to notify you of uses that occur online. Regardless of the route taken, you should be on the lookout for infringements of your trademarks. If you receive complaints about or returns on products that you didn’t sell, contact a trademark lawyer immediately.
Smaller brands don’t typically have to worry about trademark dilution unless they’re accused of engaging in the practice. If a video manufacturer started doing business under the name “Starbucks,” for instance, it’s obvious that they’re not in direct competition with the coffee chain.
Under trademark dilution laws, however, our favorite Frappuccino makers could still instruct the video production company to change their name. This is because use in another industry would still lessen the uniqueness of the Starbucks trademark. This means you should be careful about utilizing famous trademarks even if your business does not offer similar goods or services.
Trademark bullying is becoming more common as the stakes of trademark infringement continue to rise. If you aggressively defend your trademark, people may give you this label. On the other hand, if you’re accused of infringement, you might be dealing with a trademark bully.
The USPTO defines trademark bullies – also referred to as trademark trolls – as the following:
“(a) trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.”
Trademark bullies are focused on hindering competition or scaring a competitor into taking actions not warranted by the situation. In most cases, they’re simply hoping to end the use of a competing trademark.
The fundamental difference between bullying and legitimate enforcement of trademark rights comes down to whether the claim is made in good faith. As a trademark owner, though, you shouldn’t be dissuaded from moving forward just because you’re unsure if a violation has occurred. As long as your inquiry or claim is made in good faith, it’s acceptable to assert your trademark rights.
Handling a Trademark Infringement
The thousands of trademark cases that make their way through federal courts may make it seem like litigation is required to stop an infringement. In reality, most cases settle long before ever seeing a courtroom. When you identify trademark infringement actively taking place, the first step is to send a cease and desist letter. If the letter is sent by a trademark attorney that litigates, this is often enough to end the infringing actions immediately.
This is especially the case if the infringing actions appear innocent and no financial harm came from the situation. Unfortunately, there are cases in which further action might be necessary. Examples of times when trademark litigation becomes more likely include:
- The infringer is known to be a difficult person
- Evidence exists that an infringer was purposely trying to confuse customers.
- Former business partners or associates are knowingly using similar trademarks.
- You’ve been severely damaged by the infringement, or the infringer greatly profited.
Even in some of these cases, it still might not be necessary to go to court. If the defendant agrees to stop the use and make a fair payout for lost profits, the cease and desist order will have been successful. However, if your cease and desist letter is ignored or the infringer refuses to reach a fair settlement, it may be time to file a trademark lawsuit. Likewise, if you are being wrongfully accused of a trademark violation, you may have to defend yourself in court.
The Trademark Trial and Appeal Board (the TTAB)
Trademark lawsuits can be filed in a court or with the Trademark Trial and Appeal Board. In this type of case, either a Notice of Opposition is filed against a pending trademark application, or a Petition to Cancel is filed against an existing trademark registration. The case then proceeds like a streamlined version of a federal lawsuit.
We have extensive experience with these types of cases. To see a full list of the more than 250 TTAB cases that we have handled click here. If you have an opportunity to file a Notice of Opposition or Petition to Cancel, or if one has been filed against you, please see our U.S. Trademark Trial and Appeal Board page.
The Cycle of a Trademark Litigation Case
There are over 4,000 trademark infringement lawsuits filed in federal courts yearly. Although every instance of trademark litigation is unique, the basic steps of a claim follow roughly the same process. Keep in mind that a settlement can be reached during any part of this cycle, and if this occurs, the parties will request that the court immediately dismiss the case. If it doesn’t play out this way, though, you can expect each of the following steps:
- Pleadings are filed: The case begins when a complaint is filed and served on the defendant. At this time a plaintiff can also request a preliminary injunction and expedited hearing to try to immediately stop the infringement. In Federal court, the defendant has 21 days to file a response to the complaint. This could include a Motion to Dismiss which if granted can end the entire case.
- Discovery phase: After the pleadings the parties will usually have a telephonic meeting of counsel and then the discovery period begins. This allows the parties to request relevant evidence from each other which sheds a light on the strengths and weaknesses of each side’s case. Discovery includes document requests, interrogatories, requests for admission, and deposition notices. Subpoenas can also be issued to third-party witnesses. If necessary, experts can be retained to prove certain technical aspects of a case.
- Summary Judgment motions: If no facts are in dispute, either side can file a motion for summary judgment as to certain aspects of the case or to the entire case. If summary judgment as to the entire case is granted, the case will end immediately before heading to trial.
- Trial: During the trial the trademark attorneys present all of their best evidence and witnesses in an attempt to win the case. Trademark trials typically take 4-5 days and can be decided by either a judge or jury.
Regardless of the process above, there’s a very good chance you’ll never see a trial of your trademark dispute. In fact, 85 percent of all trademark damages awarded in trademark lawsuits come due to the defendant’s failure to even appear for the lawsuit.
What Courts Will Consider
No single aspect of a case can guarantee a particular verdict. Judges will consider all relevant facts of each case. However, the determining factors in a trademark infringement lawsuit are typically:
- The similarity of the trademarks at issue;
- The similarity of the goods/services at issue; and
- Whether actual confusion exists.
Defenses to Trademark Litigation
If you have been accused of trademark infringement but have not yet been sued, first you should consider filing for declaratory relief. This preemptive strike against a potential plaintiff may allow you to secure home field advantage in a lawsuit. If you have been sued, we will consider if a counterclaim or motion to dismiss is available to you.
Apart from the likelihood of confusion analysis, there are several common defenses to trademark infringement claims. These defenses won’t always apply, but often there is at least one potentially valid defense.
Doctrine of Laches
Even if trademark infringement did occur, this doctrine states that the defendant should not be held liable if the plaintiff unreasonably delayed in asserting its rights and the delay prejudiced the defendant.
This is another defense that may apply even if trademark infringement did take place. If a court finds that the claimant engaged in improper, fraudulent or dishonest behavior in relation to their trademark or in the resulting litigation, the judge may decide that punishing the defendant is unwarranted.
The doctrine of fair use allows trademarks to be used incidentally under certain conditions. This could involve advertising – such as truthfully making comparisons between the products. This could also cover parody cases so long as a product wasn’t promoted during the parody.
Manufacturers, wholesalers, and retailers may be permitted to use trademarks owned by others when promoting or describing components of their own products. Advertising that your products are constructed with a certain titanium screw, for instance, may be considered collateral use.
Common Damages in Trademark Litigation
Oftentimes the main goal of a plaintiff in a trademark case is injunctive relief rather than damages. In other words, many plaintiffs are prepared to call it a day if the trademark infringement simply stops. Regardless, monetary awards are possible. Trademark infringement monetary awards are usually based on:
- The plaintiff’s damages suffered due to the infringement.
- The defendant’s profits earned as a result of the infringement.
- The costs associated with case.
- The amount of attorney fees incurred by the plaintiff, in exceptional cases.
In order to recover attorney’s fees, a plaintiff must prove that the defendant’s actions were willful or that the defendant acted unreasonably during the litigation.
Mandour & Associates – Trademark Lawyers
At Mandour & Associates, we understand that a positive brand image is essential for success in any industry. Whether you are seeking trademark protection for the first time, or if you are embroiled in a trademark litigation matter, we can assist. Our trademark attorneys are highly experienced, and we look forward to aggressively defending your rights.
If you have a trademark related question or issue, please contact us today.