Trademark Violation

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Trademark Violation

Misuse of another company’s brand is considered a trademark violation against the company and consumers alike.   This is because American trademark laws do more than protect businesses. They protect consumers by giving them a right to choose specific products based on their unique qualities and reputation.

What is a Trademark Violation?

Often referred to as trademark infringement, a trademark violation is the unauthorized use of a trademark in connection with goods or services such that it is likely to cause confusion about the source of the goods or services.  This definition encompasses intentional and unintentional trademark violations and covers products such as a MacBook® and services such as Jiffy Lube®.

Overview of United States Trademark Protections

Each state has a unique set of trademark laws applicable to intrastate trademark violations.  However, the majority of trademark infringement cases are filed federally pursuant to the Lanham Act of 1946, 15 U.S.C. §§ 1051 et seq. Trademarks registered through the United States Patent and Trademark Office (“USPTO”) and unregistered trademarks are protected under the Lanham Act provided the trademark is currently being used in commerce and is distinctive enough to be protectable. Distinction is measured by placing the trademark into one of the following five categories:

  • Fanciful: Words or phrases invented to function solely as a trademark with little to no meaning outside of that context. Clorox® and Xerox® are examples of fanciful trademarks.
  • Arbitrary: Words or phrases with common meanings not associated with the trademarked product or service. Apple® is a common example of an arbitrary trademark because it’s a fruit used to designate the source of technology related products.
  • Suggestive: These trademarks creatively suggest something about the trademarked product or service without a direct link. For example, Bearpaw® is suggestive of boots.
  • Descriptive: These are phrases that describe a product or service in some way and thus may be difficult to protect. For example, “Smith’s Ice Cream.”
  • Generic: Anything that describes a category of goods is generic, i.e., “Shoe Store.”

Infringing Upon a Trademark

Before beginning use of a trademark, you should do a trademark search and then if appropriate file a trademark application.  Intentional or not, using a trademark that is confusingly similar to another trademark is infringement.

Trademark owners are tasked with actively protecting themselves from trademark infringement. Failure to seek out and police trademark violations can result in a loss of rights. While the government may criminally prosecute counterfeiters to protect consumers, trademark owners must enforce their rights through trademark cease and desist letters, or litigation.

Civil Trademark Infringement

United States trademark litigation is most often filed as a civil lawsuit in federal court. Trademark owners have the burden of proving the following legal elements to prove trademark infringement:

  1. The trademark is legally protectable and you have standing to enforce the trademark violation. A federally registered trademark creates a presumption of ownership and validity.
  2. Use by defendant. A plaintiff must prove that the defendant used the trademark.  Only the legal owner, agent, or licensee of a trademark may sue for infringement. Consumers or third parties negatively impacted by a trademark violation may not institute a civil suit or recover damages for the infringement.
  3. The unlawful use of the trademark causes a likelihood of confusion among consumers. There is a lot of gray area in this determination and it is the primary issue in most cases.

Federal courts will analyze and balance evidence to determine whether consumer confusion is “likely.” Some factors may be stronger than others depending on the particular facts of the case, but they often include:

  • The visual/auditory similarity of the trademarks at issue.
  • The similarity of the goods or services at issue.
  • The strength and popularity of the trademark itself. The more famous the trademark, the greater the likelihood the infringement was intentional.
  • Evidence of actual consumer confusion. Online reviews or quality complaints submitted to your company about the infringing product is evidence of actual consumer confusion.
  • Evidence of the infringer’s intent. Was the violation intended to confuse customers or give value to a less valuable brand, or did the infringer simply fail to find your trademark on the USPTO database? This isn’t an excuse for trademark violation, but it does control available damages.
  • The typical degree of care used in buying decisions.
  • Evidence of similar marketing channels.
  • Evidence of expected expansion if the products are in different markets.

Trademark Violation Damages

Section § 1117 of the Lanham Act permits trademark owners to recover monetary compensation for a trademark violation. Depending on the facts of your case, trademark violation damages may include the following:

  • An injunction. Injunctions are court orders that prohibit a defendant from using your trademark. When damages are limited, some trademark owners will only seek an injunction and court costs.
  • Your financial loses including loss of business, loss of customers, loss of profits, and/or loss of goodwill.
  • The trademark violator’s profits derived from your trademark.
  • The costs of litigation. These can be substantial if you hired economic experts or focus group firms to prove the above elements.
  • Attorneys’ fees in “exceptional cases.” In cases where the trademark violation was clear and in bad faith, a trademark owner may request an award of attorneys’ fees. These are most often awarded in counterfeit cases.
  • Punitive Damages – These “triple” damages may be awarded to the trademark owner to punish the trademark violator.

To avoid the costs of litigation, parties to a lawsuit often seek to negotiate a settlement rather than litigate the case.

International Trademark Violations

It’s no secret that substantial trademark infringement occurs outside of the United States. American trademark law only applies to trademarks violated within the United States or imported into the United States. If your trademark is not registered in China and is being sold only to Chinese citizens, then you may have a difficult road ahead to prove that a trademark violation has occurred. However, infringing products manufactured and even stored overseas but offered for sale and shipment to the United States are subject to U.S. trademark infringement claims.

International corporations often file a multi-jurisdictional trademark application through the Madrid Protocol, which streamlines trademark registration in over 100 nations. However, overseas trademark violators must generally be sued in their home nations in accordance with that nation’s trademark laws. This means hiring foriegn trademark counsel with experience litigating trademark litigation in a trademark infringer’s home jurisdiction. Most member nations understand the importance of trademark protection to safeguard citizens and encourage international commerce. There are oversees remedies for trademark violations, but you should discuss any international violation with an experienced trademark attorney.

Cease & Desist Letters to Trademark Violators

Trademark owners who recently discovered a trademark violation may wonder where to start. Most trademark owners should start by having a trademark lawyer send the infringing party a trademark cease and desist letter. These letters typically hold more weight if sent from trademark law firm that litigates and should generally include the following:

  • The trademark alleged to be violated including the registration number,
  • The alleged infringing trademark,
  • Picture comparisons between the registered trademark and the infringing mark, if applicable or helpful,
  • The reason the letter is being sent and a request that the trademark violator cease utilizing the trademark or take other necessary action,
  • A deadline for a response.

Cease and desist letters should be standard practice for trademark owners responsible for policing the illegal use of their trademarks. A batch of past cease and desist letters may be used to defend against a trademark violator’s claim that you abandoned your trademark by failing to police it.

Follow-up cease and desists letters or letters to repeat offenders may require sterner language and litigation warnings. Closely analyze the infringing party’s intent before sending a cease and desist letter.  It may be clear the use is new and accidental which may be a sign that there will be a quick resolution.  If it appears that the use is intentional, or if it has been going on for a while, it may be a sign that they matter will require more time to resolve.  An experienced trademark attorney can do more than protect you in the event of a trademark infringement.  Your trademark attorney can protect your professional reputation while winning your brand respect in the process.

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