A trademark infringement action can be brought under various theories including: confusion, dilution and contributory infringement. Although the latter is not as well developed as its counterpart under copyright doctrine, it does arise within certain contexts. There is also specific language in the statute regarding "cyberprivacy prevention" (see section 1125) that imposes liability on a person that in "bad faith registers, traffics in, or uses a domain name" in an inappropriate manner. Each theory will be looked at separately but a threshold question arises, especially (but not solely) in the Internet context, regarding whether or not the trademark in question was "used" at all.
Before proceeding however, a brief discussion of the relevant legal standard regarding liability is required. In order to prevail in an infringement claim for either a registered on unregistered mark, a plaintiff (see section 1125 above) must establish the following: (1) it has a valid mark that is entitled to protection; (2) the defendant used the mark; (3) in commerce;(4) in connection with the sale or advertising of goods or services; and (5) without the plaintiff's consent. In addition, the plaintiff must show that the defendant's use of the mark is "likely to cause confusion as to the affiliation, connection, or association of the defendant with the plaintiff, or as to the origin, sponsorship, or approval of the defendant's goods, services or commercial activity by plaintiff" (see 1-800 Contacts v. WhenU.com discussed below).
Was the trademark used?
Use of the trademark is the threshold question that must be decided before any liability triggers. If there is no "use" on the part of the defendant then any subsequent arguments (e.g. regarding "confusion") are, according to one court, "putting the cart before the horse." A leading case in this space is 1-800 Contacts v. WhenU.com (2d. Cir. 2005). The issue was whether WhenU.com, via its web-based "contextual ad displaying software" SaveNow, "used" 1-800 Contacts' trademark when triggering competitor ads? Apparently, the 1-800 Contacts URL (its trademark) was stored in a WhenU.com directory and was the technical trigger to display the ads (i..e when a user happened to be on a page with that URL). The lower court held in favor of the plaintiff. The appeals court reversed, finding the analysis set forth in similar cases against WhenU.com from sister circuits "compelling and persuasive." Essentially, the court held that while there may have been a "use" of the 1-800 trademark, it was not the kind of use contemplated by the Lanham Act. In short, the use was in a "non-trademark" manner, and therefore liability could not be triggered.
Notwithstanding the fact that WhenU prevailed in the action above, trademark usage related to Internet advertising is far from settled law, witness the continuing legal battles between Google & American Blind and Wallpaper Factory, Inc. over the use of trademarks as part of Google's AdWords program. A summary and discussion of which can be found here. The preceding discussion is primarily useful from a purely historical perspective since Google and American Blind entered into a settlement agreement on August 31, 2007 (see Internet Implications). Despite the enthusiasm generated by this settlement (rightfully so) there was no holding in this case (although American Blind likely read the tea leaves) and the USSC has yet to speak on the issue.
In other contexts, a kind of "nominative" used is allowed if certain requirements are met. Courts have recognized that it is often virtually impossible to refer to a particular product for the purpose of comparison, criticism, or as a point of references without the use of a trademark. Such "nominative" use is generally allowed if three requirements are met: (1) the product or service in question must be one not readily identifiable without the use of the trademark; (2) only so much of the mark or marks as is reasonably necessary to identify the product or service is used; and (3) the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder (see The New Kids On The Block v. News America Publishing, Inc.(9th Cir. 1992)).
Is there confusion or "likelihood of confusion?"
Once we get beyond the threshold question of "use" one of the primary theories used in an infringement action under the Lanham Act is confusion. That is, the plaintiff alleges "marketplace confusion" (or the likelihood of same) based on the defendant's use of the mark. A leading case here is AMF v. Sleekcraft Boats (9th Cir. 1979). The court in AMF identified the following factors that are relevant vis-a-vis the "Likelihood of Confusion." The factors are as follows: (1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines. Each factor with respect to the AMF court's analysis is covered briefly below.
It should be noted that the court's analysis of the factors was subsequent to a finding that it agreed with the lower court that the two marks in question were "non-competitive." That is, the sellers (of boats) each targeted a related, but distinct, sub-market. This distinction is important because the court stated that where goods compete, and the marks are similar, confusion is expected; but where the goods are merely related, other factors must be considered as part of the calculus. The analytics here represent a kind of balancing test among the factors.
Factor 1: Strength of the Mark
Strength is an analysis based on the "continuum" discussed in What constitues a mark?. The court found that a weak mark is entitled to only a "restricted range of protection." Therefore the court stated: "only if the marks are quite similar, and the goods closely related, will infringement be found."
Factor 2: Proximity of the Goods
The more related the goods the less similarity is required between the marks in order for infringement to be found. The rationale is that relatedness may allow the consuming public to infer a relationship among the sellers where none in fact exists.
Factor 3: Similarity of the Marks
The test for similarity is within the context of how the marks are found in the marketplace. Similarity must be analyzed on three different levels: (1) sight; (2) sound; and (3) meaning. Similarities are weighted more than differences. Sound is important because reputation is often established by "word of mouth." Slight differences in sound are of no avail to the infringer. With respect to meaning, the closer the words are to being synonyms, the higher the probability of confusion. Sight obviously refers to how the marks look when used in marketing and sales collateral, etc.
Factor 4: Evidence of Actual Confusion
Evidence of actual confusion, though difficult to establish, is persuasive proof that future confusion is likely. The inference here is clearly that where the plaintiff can show actual confusion then they are likely to prevail.
Factor 5: Marketing Channels
Where the marketing channels "converge" the probability of confusion increases. This factor looks at the method of distribution, the sales price, and the way the products are advertised.
Factor 6: Type of Goods and Purchasers Care
This factor looks at the nature and quality of the respective goods and the "sophistication" (or lack thereof) of the consuming public. The more sophisticated the buyer (and the more consequential the purchase) the less likelihood of confusion, although the potential for confusion is not completely eliminated even here. If the goods are of similar quality then there is less risk of a "disparagement by association." However, the court noted that current quality is no guarantee of future quality.
Factor 7: Intent
This is essentially an inquiry as to whether there was any "bad faith" on the part of the defendant. That is, did the defendant purposely engage in an attempt to deceive the public. Bad faith speaks more to the potential remedy than to the probability of confusion.
Factor 8: Likelihood of Expansion
Comments: In a recent case, Perfumebay.com v. eBay (9th Cir.2007), the court shed some light on how the Sleekcraft factors apply within an Internet context. The court stated as follows:
Comments: As should be evident from this analysis, but is nonetheless worth re-emphasizing, much of IP litigation can be quite expensive. Simply considering the evidentiary requirements necessary to make the arguments above should give most Internet entrepreneurs pause. Defending a trademark infringement case is not a place you want to be, especially since, in most cases, it can readily be avoided. The selection of an appropriate (i.e. one that is "inherently distinctive" and preferably "fanciful") mark, early in the "lifecycle" of the good or service, is almost always the best defense.
Comments: There is a little known, but highly "Internet relevant" trademark doctrine called the "Initial Interest Confusion Doctrine" that expedites the analysis described above by asking a more basic question, which is: "Did the defendants use of the mark evoke the consumer's interest, despite the fact that no sale or confusion subsequently occurred?" Cybersquatting and the deceptive use of meta tags are examples (see Internet Implications). There is still significant debate as to whether this doctrine is on a sound footing. A historical perspective can be found here.
Has the mark in question been diluted?
Dilution is another theory of infringement that is available and one which has nothing to do with confusion. The widely cited example is the case of Eastman Photographic Materials Co. v. Kodak Cycle (Eng. 1898). Eastman is obviously that brand recognized as "Kodak" and the other party sold bicycles. The court was well aware that there was no likelihood of confusion but nonetheless granted Eastman an injunction on the grounds that the use of "Kodak" on bicycles would harm Eastman, even if there was to possibility of confusion as to source.
In a more recent U.S. case, Mortellito v. Nina of California (S.D.N.Y. 1972), the court succinctly stated the harm caused by dilution as follows:
The obvious question here is what marks are entitled to this kind of protection? The Federal Trademark Dilution Act of 1995 (FTDA) added a dilution statute to the Lanham Act (see section 1125(c)), and helps answer this question. Essentially, this Act codifies protection from dilution of "famous marks." What exactly was Congress attempting to fix with the FTDA? An excerpt from the legislative history of the act may shed some light:
The concepts of trademark "blurring" and "tarnishment" are treated as a subset of dilution (see The Coca-Cola Company v. Gemini Rising Inc. (E.D.N.Y.1972)).
Comments: The USSC, in the case of Mosely v. V Secret Catalogue, Inc. (2003), reversed a summary judgment in favor of Victoria's Secret, by holding that the evidentiary requirements of the FTDA had not been met. The Court stated as follows:
Many commentators believe that the USSC has essentially taken the "teeth" out of the FTDA ( see Deere & Company v. MTD Holdings, Inc. (S.D.N.Y. 2003); Savin Corporation v. The Savin Group (S.D.N.Y. 2003)).
Is there contributory infringement?
A seller may be on the hook despite the fact that they are not using the mark in question directly. A plaintiff may allege that seller knowingly allowed the use of the mark, in violation of the plaintiff's rights, and for its own economic gain. One of the critical questions here is whether the seller has the ability to "monitor and control" the use of the mark? In a non-Internet related case the court in Fonovisa Inc. v. Cherry Auction Inc.(9th Cir. 1996) found contributory trademark infringement on the part of a flea market owner. For an analysis of how the doctrine applies within the Internet context see ISP Liability for Contributory TM Infringement or as a PDF here.
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