Trademark Tutorial

There is evidence to suggest that trademark usage is as old as trade itself. Marks have been found on goods going back to the earliest times of recorded commerce. In the U.S., unlike copyright and patent protection, there is no specific provision in the Constitution (e.g. Article I, Section 8) that enabled the protection of trademarks. It was not until 1870 that the first trademark statute was enacted (although common law protection existed prior to), and this one met an early demise, struck down by the USSC in 1879 as part of the Trade-Mark Cases on the grounds that it exceeded the Congressional powers contained in Article I, Section 8. Congress subsequently found the necessary "hook" under the Commerce Clause and responded with the Trademark Act of 1881. The current incarnation is the Lanham Act of 1946 located here.

The Lanham Act provides for registration of marks used nationally in interstate commerce however each state has its own system of registration as well. Trademarks, much more so than copyright, are subject to both state statutory and common law as well as to the Federal statute. In general, registration is not required to obtain state trademark protection or to enforce trademark rights in state courts. The state and federal systems of protection exist side-by-side providing varying levels of protection depending on when said rights were established by the seller.

Trademarks do not depend on novelty (as do patents and copyrights to varying degrees) but rather, as the USSC stated in the Trade-Mark Cases, trademark requires "no fancy or imagination, no genius, no laborious thought" they simply reward a seller that was first to use a distinctive mark in commerce. Although contemporary marketeers would likely take issue with this today, it remains true that trademark law is devoid of public policy arguments centered on encouraging "inventiveness" or "progress in the useful arts and sciences."

This tutorial focuses on the Federal statute, however, similar to other tutorials, a brief mention is made of international treaties. Likewise, state law, in the aggregate, is also briefly covered in the What law controls? section.

While what is commonly thought of as trademarks (e.g. symbols, names and logos) are still likely to make up the lion's share of marks, the canonical categories have now been joined by numerous other artifacts such as shapes, sounds, smells, moving images, taste and more. Courts have been willing to accept other artifacts as long as they fulfill the basic trademark function (i.e. the identification of the source & origin of goods and services). In Qualitex v. Jacobson Products (USSC 1995) the Court upheld the use of a "color" as a trademark, stating: "We conclude that, sometimes, a color will meet ordinary trademark requirements." The Court then further stated that if the requirements are met: "no special legal rule prevents color alone from serving as a trademark."  This does not imply that all words and symbols (etc.) can be trademarked. Clearly, too liberal a standard would allow ownership of the "basic building blocks of language itself" and this is neither accepted nor encouraged by the doctrine.

The extent to which any given mark is deserving of protection usually depends on what is referred to as the "strength of the mark." The strength lies along a classification continuum as follows: (1) arbitrary (and fanciful) marks; (2) suggestive marks; (3) descriptive marks; and (4) generic marks. Arbitrary marks qualify for the most protection (if other requirements are met) and generic marks qualify for no protection (descriptive marks also qualify for no protection unless the mark has acquired "secondary meaning" (see What are the requirements?). Each node of the continuum is a legal term of art defined by both statutory authority and case law.

In addition, there are other mark categories that a business person should be aware of, such as: service marks, which describe services as opposed to products/goods; trade names, which are marks that identify a business rather than a good or service; a collective mark, which may be held by a group for use by its members; and a certification mark, which provides a kind of "seal of approval." Finally, there are the concepts of trade dress and product configuration. Trade dress refers to the distinctive packaging or "look and feel" of a seller's offering while product configuration usually refers to the distinctive design and shape of a product's container.

On the Internet, trademarks are used on websites, white papers, brochures and other digital artifacts. They are also registered as domain names, used to link to other sites, and incorporated in meta tags. Because trademarks can readily be used in these and other electronic embodiments, they can also be readily misappropriated. Like copyright, the trademark doctrine has not been re-written for the age of global communications, but courts have had to apply it in a unique and often unchartered way.

Section  1051 of the statute, located in its entirety here, clearly illustrates the requirement that the mark be used in commerce.

§ 1051. Application for registration; verification

(a) Application for use of trademark

(1) The owner of a trademark used in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the Patent and Trademark Office an application and a verified statement, in such form as may be prescribed by the Director, and such number of specimens or facsimiles of the mark as used as may be required by the Director.
(2) The application shall include specification of the applicant’s domicile and citizenship, the date of the applicant’s first use of the mark, the date of the applicant’s first use of the mark in commerce, the goods in connection with which the mark is used, and a drawing of the mark.

Comments: This section also requires that the verified statement also specify, among other things, that to the  best of the applicant's knowledge no other person (or legal entity) has the right to use the mark or one that is "substantially similar" such that confusion in the marketplace would occur. Notice that the requirement here is of "existing use" in commerce, and other procedures are required for "intention to use" under section 1051(b). Under the latter section, for registration to be finalized (with the  exception of some international implications) the requirement for "use in commerce" must still be met (i.e. the "intention to use" application must be amended at this time).

When do rights attach?

Rights for marks that are "inherently distinctive" (i.e. allow for the immediate identification of the source) attach under a priority of use concept, otherwise known as the "race to the marketplace" test. If the mark in question is not registered, then generally protection only extends to a bounded geographic area established by such factors as reputation, advertisements or actual sales. Registered marks, on the other hand, receive nationwide protection regardless of where they are used.

What is meant by "use in commerce?"

The "intent to use" section was added in 1989 and prior to this time "actual use" in commerce was required for registration. This encouraged sellers to "ship" small quantities of goods in order to meet the "letter of the law." This practice became known as "token use." Post 1989, while actual use is still required for registration in the principal register, an applicant that has a "bona fide intention" to use may (i.e. if other requirements are met) be given a "notice of allowance" by the USPTO. The applicant is then given a set period of time to submit a verified statement regarding actual use, and if allowed, the initial application is considered "constructive use" and priority is established as of the date of the initial application. A leading case prior to the 1989 modification is Zazu Designs v. L'Oreal (7th Cir. 1992).

What is meant by "inherently distinctive?"

The answer to this question quickly leads us into the arcane nature of trademark doctrine but for the purpose of this tutorial broad strokes will suffice. Here you will need to review the "classification continuum" introduced in the What Constitutes a Mark? section. Marks that are arbitrary, fanciful and suggestive are considered to be "inherently distinctive." The definition of each "node" of the continuum is as follows:

Fanciful: this is a mark that has no other meaning than that which is attached to the trademark itself (e.g. "Lego" used in association with bricks).

Arbitrary: this is a (word) mark that does have meaning, but the meaning has nothing to do with the goods or services with which it is associated (e.g. "Apple" used in association with computers or "Kodak" used in association with photo supplies).

Suggestive: this is a mark that brings to mind a characteristic of the good or service without actually describing it (e.g. "Coppertone" used in association with sunblock or Vision Center" for eye doctors). The consumer is required to use some "imagination" to determine the nature of the goods or services.

Descriptive: this is a mark that explicitly identifies a characteristic of a good or service with which it is attached (e.g. "American Airlines").

Generic: this is a mark that uses "ordinary words" to represent the words "ordinary meaning" (e.g. desktop computer).

A generic mark receives no protection because, as mentioned previously, this would be tantamount to allowing ownership of the language itself (e.g. in a somewhat analogous manner copyright doctrine does not allow for the ownership of ideas). Some words can lose their trademark status because they subsequently "morph" into the language. This concept is called "genericide" (see Defenses). A descriptive mark, for similar reasons, gets no immediate protection unless the mark has acquired "secondary meaning."

It should be noted that there are no "bright lines" between the "nodes" in the continuum but rather, as one court stated, the categories are "like tones in a spectrum" and "tend to blur at the edges and merge together." The labels used as "nodes" are more guidelines than definitions and like much in IP law, there are always varying shades of gray. A leading case here is Soweco v. Shell Oil (5th Cir. 1980);  see also Vision Center v. Opticks (5th Cir. 1980).

What is secondary meaning?

Descriptive marks must clear an additional hurdle in order to acquire trademark status because the words used in these marks can often be used to describe the underlying product itself (e.g. does "American Airlines" refer to a single source or all airlines that happen to be American?). Allowing ownership by a particular seller would provide the holder with a significant and unfair competitive advantage.

Secondary meaning is satisfied if consumers associate the descriptive words with a single source, despite the fact that the source, while unique, need not be explicitly known (i.e. the requirement can be met with an "anonymous single source"). The Lanham Act codifies the lack of protection for descriptive marks and the secondary meaning exception in section 1052. A leading case here is Zatarain's v. Oak Grove Smokehouse (5th Cir. 1983). To establish secondary meaning in an infringement action, the plaintiff has the burden of showing "that the primary significance of the term in the minds of the consuming public is not the product but the producer." This is usually a difficult burden to meet.

As mentioned briefly in the Introduction trademarks are controlled by both a Federal statute and by state statutory and common law. The law of unfair competition is the mechanism by which states' provide common law protection of trademarks. State statutes obviously differ by jurisdiction but many states have adopted a version of the Model Trademark Bill (MTB) or the Uniform Deceptive Trade Practices Act (UDTPA). The MTB provides for registration of trademarks while the UDTPA does not.

The answer to the question posed above (regarding what law controls) is that it depends under what theory an action is brought. Under a theory of unfair competition state law would control. Under an infringement theory based on the Lanham Act federal law would control. Keep in mind that the Lanham Act was enacted under the powers vested in Congress by the U.S. Constitution's "commerce clause" (see History). Therefore, protection under the Lanham Act only applies when there is some interstate commerce involved. Many (but not all) businesses on the Internet do business nationally, and therefore this requirement is presumably readily met. But, merely having a website wherein goods or services are only sold within a single jurisdiction is probably not sufficient.

Also, keep in mind that a plaintiff must get jurisdiction in order to bring an action. If the plaintiff is in Florida and the prospective defendant is in California then either the "minimum contacts" requirements of International Shoe must be met (see Jurisdiction) or jurisdiction must be obtained, in the alternative, under the federal statute, if applicable (see below). While this is not an insurmountable hurdle, it is always important to consider jurisdictional issues with respect to actions that originate on the Internet. Worst case, in the hypothetical above, the plaintiff could get jurisdiction in California, but this has its own set of problems principally related to various transaction costs. However, under the ACPA (see Internet Implications), which amended the Lanham Act, there are several plaintiff "jurisdiction friendly" provisions that substantially ease this burden.

By and large the two systems of law (i.e. state and federal) are complementary and readily coexist under the historical framework of American intellectual property jurisprudence. However, the complexity goes up significantly when contemplating causes of action that have international implications; most of these are simply out of reach for all but the largest corporations.

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 

Where the goods are related, but currently non-competitive, there is an increased probability that expansion will lead to direct competition. This factor, if found, weighs in favor of the plaintiff.

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:

In the Internet context, the three most important Sleekcraft factors in evaluating likelihood of confusion are (1) the similarity of the marks, (2) the relatedness of the goods and services, and (3) the parties' simultaneous use of the Web as a marketing channel... When this controlling troika or Internet trinity suggests confusion is likely, the other factors must weigh strongly against a likelihood of confusion to avoid the finding of infringement. If the Internet trinity does not clearly indicate a likelihood of consumer confusion, a district court can conclude the infringement analysis only by balancing all the the Sleekcraft factors within the unique context of each case.

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:

Dilution is an injury that differs materially from that arising out of the orthodox confusion. Even in the absence of confusion, the potency of a mark may be debilitated by another's use. This is the essence of dilution. Confusion leads to immediate injury, while dilution is an infection, which if allowed to spread, will inevitably destroy the advertising value of the mark.

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 intent is to] create a federal cause of action to protect famous marks from unauthorized users that attempt to trade upon the goodwill and established renown of such marks, and thereby, dilute their distinctive quality. ... The bill defines the term "dilution" to mean "the lessening of the capacity of a famous mark to identify or distinguish famous goods or services regardless of the presence or absence of (a) competition between the parties, or (b) likelihood of confusion, mistake or deception." Thus, for example, the use of DUPONT shoes, BUICK aspirin, and KODAK pianos would be actionable under this legislation.

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:

Noting that consumer surveys and other means of demonstrating actual dilution are expensive and often unreliable, respondents and their amici argue that evidence of an actual "lessening of the capacity of a famous mark to identify and distinguish goods or services," §1127, may be difficult to obtain. It may well be, however, that direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proven through circumstantial evidence--the obvious case is one where the junior and senior marks are identical. Whatever difficulties of proof may be entailed, they are not an acceptable reason for dispensing with proof of an essential element of a statutory violation.

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.

There are a number of defenses that might be available to a defendant, obviously depending on the factual context within which the plaintiff brings the action. These defenses include: genericide, abandonment, non-trademark use, functionality, parody and fair use. Each defense is covered below. Some of these were briefly mentioned in the Infringement section.

Genericide

A word becomes "generic" when in the minds of a substantial majority of the consuming public it comes to stand for the "type of product" (in trademark terms the genus) as opposed to a particular seller or source (a species of the genus). The words "aspirin" (see
Bayer Co. v. United Drug Co. (S.D.N.Y. 1921)), "cellophane" (see DuPont Cellophane Co. v. Waxed Products Co.(2d Cir. 1936)) and "thermos" (see King-Seeley Thermos Co. v. Aladdin Industries (2d Cir. 1973)) have all been held to be generic.

Google, Xerox and Lego are all examples of companies that maintain active campaigns to keep their marks from "falling into" genercide. They do this by notifying customers and various other stakeholders (e.g. the media) that their marks should be used as adjectives (as opposed to a nouns or in Google's case a verb) that describe their brands, and not otherwise. Once a word becomes generic it loses its protection as a mark. Obviously, this could have a significant negative economic impact on the company whose brand it represents. The risk is quite real as the court in America Online, Inc. v. AT&T Corp., (4th Cir.2001) stated:

"[E]ven when created words for new products have become strong marks, the public’s pervasive use of these marks sometimes creates a real risk that their distinctiveness will disappear, a process Professor [J. Thomas] McCarthy terms ‘genericide’ . . . ."

When a mark has become "generic" the primary rationale behind the defense is one of necessity. It simply becomes too difficult for a competitor to use a substitute. For example, the substitute for "cellophane" would be "regenerated cellulose in thin transparent sheets used especially for packaging.

Abandonment

Section 1127 of the statute has the following to say regarding abandonment:

A mark shall be deemed to be “abandoned” if either of the following occurs:

(1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. “Use” of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.

(2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark. Purchaser motivation shall not be a test for determining abandonment under this paragraph.

Comments: The first paragraph above is a "use or lose it" standard. The rationale is likely based on the fact that a trademark is a type of "property" and, as in property law in general, there is bias in favor of use. The second paragraph speaks to the status of a mark that has fallen into genericide. The bottom line is that in order to preserve a mark there must be a consistent (albeit minor) use of the mark in commerce and the holder must not allow the mark to become generic.

Non-Trademark Use

Infringement is only triggered when a mark is used as a mark. An example of non-trademark use in the Internet context is the WhenU.com case discussed in the Infringement section. Another example is the use of a mark for journalistic purposes (see The New Kids On The Block v. News America Publishing, Inc.(9th Cir. 1992)). The latter use is sometimes referred to a "nominative." A mark used as a title for a song has been held to be non-trademark use (see Mattel v. MCA Records (9th Cir. 2002)). The non-trademark use of a mark is a kind of "fair use" (see below), but the trademark doctrine invokes this term in a much more limited sense than its counterpart in copyright doctrine. As is often the case, things are not what they seem in the esoteric fringes of intellectual property law.

Functionality

The trademark functionality doctrine is at times "triggered" as an affirmative defense in cases involving "trade dress" and "product configuration."  The protection of a product's function is the purview of patent law and is precluded under both copyright and trademark doctrine. The court in the case of Wilhelm Pudenz v. LittleFuse (11th Cir. 1999) makes this point quite clear as follows:

The functionality doctrine is a judicially created rule that predates the Lanham Act. Under this rule, no trademark rights may be claimed in a product's functional shapes or features. See Epic Metals Corp. v. Souliere,  99 F.3d 1034, 1038 (11th Cir.1996)("A products features are protectible as trade dress if they are primarily non-functional."). This proscription serves two purposes. First, by ensuring that competitors remain free to copy useful product features, it prevents the trademark law from undermining its own pro-competitive objectives. Qualitex Co. v. Jacobson Products Co., Inc.,  514 U.S. 159, 164 , 115 S.Ct. 1300, 1304, 131 L.Ed.2d 248 (1995). Second, the functionality doctrine prevents the trademark law from conflicting with the patent law by eliminating trademark monopolies of potentially unlimited duration on a product's utilitarian features.

The courts are adamant in maintaining the proper demarcations between the various IP doctrines and are sensitive to the strong monopoly rights conferred on patent holders. Thus, they do not allow "willy nilly" the circumvention of the rigorous process required of applicants in order to establish patent rights, and will not confer such rights through the "back door" of copyright or trademark.

Parody

For reasons similar to why parodies are allowed as a type of "fair use" under copyright doctrine, trademark doctrine likewise allows the use of marks in such expressions and commentary (note, however, that it is not "per se" given the "fair use" label under trademark doctrine as discussed below). It is clear (again analogous to copyright) that a commentator must be allowed to "evoke the mark" in order to poke fun at it. It is a defense rooted in the first amendment and the long established tradition of parody in American pop culture. Trademark rights confer a kind of monopoly on the use of symbols and there are limits that the law imposes in order to protect other preferential rights. An example of this is a case the the 9th Circuit called "Speech-Zilla meets Trademark Kong" (Mattel v. MCA Records (9th Cir. 2002)), proving that judges have also been infected by the "hipness" bug. The Mattel court  upheld the use of "Barbie" in a song that apparently did not hold the "doll" in such high esteem as Mattel the corporation would have preferred. The court held that this was "nominative fair use."

Fair Use

What exactly is "fair use" under trademark doctrine? Before attempting to answer this question it may be worthwhile to take a moment to reflect. The law has often been called a "system of communication" (e.g. like TCP/IP but not as efficient). In order to understand what is being said you must understand the protocol, the links and the feedback loop. It may sound like English, but often it is not. At least not the kind English supported by dictionaries. It is a kind of English only supported by the case law. To understand what something means you must understand the cases, that is the price of admission. There is a movement (of sorts) to cut through this morass (to the degree possible) and provide the masses a view behind the curtain. Some call it "interdisciplinary work" others call it "open source law." It is basically an attempt to explain, more or less in plain terms, what the protocol means so that "ordinary" people understand. That is the objective behind the "tutorials." It is an attempt at a kind of "news you can use." They may fall short of the mark, but that is the intent. Therein lies both the benefit and the danger. That is why "tutorials" (from any source) can never be interpreted as legal advice (see our Terms of Use). The legal protocol requires precision and it is exactly that which is often lost in translation.

Fair use, as a defense in the trademark sense, is limited to a narrow meaning best exemplified in the case of Zatarain's v. Oak Grove Smokehouse (5th Cir. 1983). Here the argument was over the trademark "Fish-Fri" owned by Zatarain. The court explains the use of the defense as follows:

Although Zatarain's term "Fish-Fri" has acquired secondary meaning in the New Orleans geographical area, Zatarain's does not now prevail automatically on its trademark infringement claim, for it cannot prevent the fair use of the term by Oak Grove and Visko's. The "fair use" defense applies only to descriptive terms and requires that the term be "used fairly and in good faith only to describe to users the goods or services of such party, or their geographic region." (quoting U.S.C. section 1115(b)(4)). The district court determined that Oak Grove and Visko's were entitled to fair use of the term "fish fry" to describe a characteristic of their goods; we affirm that conclusion.

Zatarain's term "Fish-Fri" is a descriptive term that has acquired secondary meaning in the New Orleans area. Although the trademark is valid by virtue of having acquired secondary meaning, only that prenumbra or fringe of secondary meaning is given legal protection. Zatarain's has no legal claim to an exclusive right in the original, descriptive sense of the term; therefore, Oak Grove and Visko's are still free to use the words "fish fry" in their ordinary, descriptive sense, so long as such use will not tend to confuse customers as to the source of the goods.

But the excerpt above begs the question how much use by competitors might indeed lead to confusion? That is left for another link in the chain to determine. Notice however, that the court in Mattel used the phrase "nominative fair use." Were they referring to what 5th Circuit was talking about in Zatarain? No, despite the fact that "fair use" was part of the holding. The cases mean what the cases mean, nothing more. In order not to lose track of "Waldo" you must keep in mind a quote by Supreme Court justice Oliver Wendell Holmes: “the law is not something to be derived from a set of axioms via the power of deductive reasoning, but rather the law is ultimately whatever a court says that it is.”

There are a number of remedies available to a prevailing plaintiff. First and foremost a plaintiff is likely to seek injunctive relief in order to prevent any further harm to their brand (i.e. lost of reputation value and lost of profits).

Injunctive Relief

Section 1116(a) provides for injunctive relief.

§ 1116. Injunctive relief

(a) Jurisdiction; service
The several courts vested with jurisdiction of civil actions arising under this chapter shall have power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office or to prevent a violation under subsection (a), (c), or (d) of section 1125 of this title. Any such injunction may include a provision directing the defendant to file with the court and serve on the plaintiff within thirty days after the service on the defendant of such injunction, or such extended period as the court may direct, a report in writing under oath setting forth in detail the manner and form in which the defendant has complied with the injunction. Any such injunction granted upon hearing, after notice to the defendant, by any district court of the United States, may be served on the parties against whom such injunction is granted anywhere in the United States where they may be found, and shall be operative and may be enforced by proceedings to punish for contempt, or otherwise, by the court by which such injunction was granted, or by any other United States district court in whose jurisdiction the defendant may be found.

Comment: Notice that a plaintiff can file for injunctive relief in any federal district court and the defendant can be served anywhere in the nation. This is certainly a plaintiff/business friendly provision and makes sense since the statute provides national protection.

Money Damages

Injunctive relief is granted, where warranted, to prevent future harm, but the prevailing plaintiff is also entitled to money damages for past harm. Section 1117(a) (see below) allows the plaintiff to recover the following: (1) defendants profits; (2) any damages sustained by the plaintiff; and (3) cost of the action.

§ 1117. Recovery for violation of rights

(a) Profits; damages and costs; attorney fees
When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125 (a) or (d) of this title, or a willful violation under section 1125 (c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover

(1) defendant’s profits,
(2) any damages sustained by the plaintiff, and
(3) the costs of the action.

The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party.

Comments: Another plaintiff friendly provision is the respective burdens described in (3) above. The plaintiff need only prove gross sales (a number more readily attainable) and it is the defendant's burden to prove all deduction therefrom. Section 1117(b) allows for treble damages if a court finds the intentional use of a counterfeit mark. Section 1117(d) allows for statutory damages for domain name violations.

Internet trademark cases, although perhaps followed less widely than copyright cases (e.g. by the media and other non-legal stakeholders) have nonetheless had a significant impact with respect to how business is done online. The legal disputes cover a wide range of Internet specific contexts including: cybersquatting,  domain name trademark dilution, genericide, keywords, meta tags, popup ads, email, spamming and more. To the uninitiated (including some "bricks and mortar" trademark attorneys) this bewildering array of technical jargon is daunting. Yes, the old doctrine still applies (e.g. "likelihood of confusion") as discussed elsewhere, but the fact patterns vary significantly from the "world of atoms."

This section highlights legislation dealing with some specific issues as well as controversies that are yet to be settled. Even where there is legislation on point, there still appears to be varying shades of gray with respect to how the law is applied. It is certainly not possible to cover all permutations of Internet related trademark issues that may arise, and therefore the illustrations provided here are necessarily constrained.

Anticybersquatting Consumer Protection Act (ACPA)

The ACPA was enacted in 1999 to address "the unauthorized registration or use of trademarks as Internet domain names or other identifiers of online locations (commonly known as 'cybersquatting')." Congress found that this unauthorized registration had the following deleterious effects: (1) results in consumer fraud and public confusion as to the true source or sponsorship of products and services; (2) impairs electronic commerce, which is important to the economy of the United States; and (3) deprives owners of trademarks of substantial revenues and consumer goodwill.

The ACPA added section 1117(d) to the Lanham Act providing statutory damages (in  lieu of actual damages) for the specified domain name infringement. It also added provisions under section 1125(d). In general, to succeed in an action under the ACPA a plaintiff must show: (1) that the mark in question is a distinctive or famous mark entitled to protection; (2) that the defendant registered domain names that are "identical or confusingly similar to" the plaintiff's mark; and (3) that the defendant registered the domain names with the bad faith intent to profit from them (see Shields v. Zuccarini (3d Cir. 2001) citing section 1125(d)(1)(A)).

Comments: Certainly the ACPA amendments to the Lanham Act have made it easier for a plaintiff to bring a "domain dispute" cause of action (e.g. section 1125(d)(2) provides an "in rem" civil action), but this nonetheless involves all the associated downsides of bringing suit, namely litigation costs and the time required to get resolution. It also requires an international plaintiff to have "substantial ties" with the U.S. in order to bring an action under the federal statute. For these, and other reasons, many plaintiffs prefer to arbitrate a solution through ICANN as discussed below.

ICANN, Registrars & the UDRP

What is ICANN? ICANN is an acronym that stands for the "Internet Corporation for Assigned Names and Numbers" and its website is found here. It was formed in 1998 and describes itself as a "not-for-profit partnership of people from all over the world dedicated to keeping the Internet secure, stable and interoperable." While this may sound (and is) a somewhat lofty "mission statement" the organization's primary mission is to manage and coordinate the Internet's Domain Name System (i.e. the system that translates IP addresses into recognizable names such as www.google.com). The U.S. Department of Commerce selected ICANN for this role in 1998 and the DNS has remained under its care ever since.

While ICANN is responsible for registrar accreditation (e.g. for an organization such as GoDaddy that allows consumers to purchase domain names) and other activities, what is of primary interest here is its Uniform Domain Name Dispute Resolution Policy (“UDRP”). The UDRP is a policy between a registrar and its customer and is included in registration agreements for all ICANN-accredited registrars (to see a list all ICANN-acredited registrars go here).The UDRP allows a trademark holder to initiate dispute proceedings arising from alleged abusive or inappropriate registration of domain names. The UDRP is conducted under the Rules for Uniform Domain Name Dispute Resolution Policy and is essentially a non-judicial form of resolution.

The way it works is that when you buy a domain name (actually it is more like "renting" because of the requirement to renew) from an accredited registrar you are agreeing to submit to a mandatory administrative proceeding in the case that a third party complains to a Provider (i.e. an organization approved by ICANN to resolve disputes) about the registered domain. A third party has a right to complain if:

(1) your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

(2) you have no rights or legitimate interests in respect of the domain name; and

(3) your domain name has been registered and is being used in bad faith.

If the third party prevails in front of the administrative panel the remedies available are limited to requiring the cancellation of your domain name or the transfer of your domain name registration to the third party. Money damages are not available. However, nothing within the UDRP prevents either party from submitting the dispute to a court of competent jurisdiction for resolution either before the proceeding is commenced or after it is concluded. Additional information regarding the UDRP process can be found here.

Comments: The policy indicates that any decision by the panel will be published in full over the Internet. This is clearly targeted at using the normative rules (i.e. reputation value) of the Internet to control inappropriate behavior. While this has no effect on "rogue" opportunists, it is likely to have an impact on organizations that have an incentive to play by the rules. The current UDRP fee schedule can be found at National Arbitration Forum and circa 2008 ranges from $1,300 (USD) for 1-2 disputed domain names and a single member panel to $5,000 (USD) for 11-15 disputed domain names and a three-member panel. The fees are in addition to any attorney fees that a respective party may incur.

Comments: There are a number of advantages related to using the UDRP (i.e. as opposed to a law suit) including resolution time (usually within a few months or less) and a significant reduction in dispute resolution costs. In addition, the UDRP can be enforced against all domain holders (i.e. nationally and internationally regardless of jurisdiction) as opposed to the jurisdictional enforcement limits imposed on the courts.

Search, Advertising & Trademarks

There have a been quite a few (well in the hundreds) of cases that deal with the intersection of trademark doctrine and online advertising. These cases are obviously important to the Internet and its further evolution since so much of the content that consumers find useful is "ad sponsored" (i.e. it is mostly advertising spend the has fueled the explosive growth). In addition to the case law, there are FTC regulations and statutes that implicate what can pass as fair advertising in the online world. This section will highlight some of the leading cases and point to where controversies still exist. There are some "rules of the road" that have been established but this an area that is still evolving.

Case Law

One of the early cases was Playboy v. Netscape (9th Cir. 2004). This case dealt with the doctrine of "initial interest confusion" which, as mentioned in the Infringement section, is somewhat controversial because it creates liability despite the fact that there is no confusion at the time the sale is made. The theory is that the seller (via banner ads in this case) has gained an advantage through the inappropriate use of the holder's mark. The 9th Circuit rejected all of Netscape's defenses including fair use, nominative use, and functionality. However, the 9th Circuit emphasized that this was a "narrow holding" based on "unlabeled banner ads" and that clearly labeled ads would not trigger liability, apparently because there would be "no initial confusion." This case was a victory of sorts for trademark holders, but the victory celebration was not long lasting.

Playboy was followed by GEICO v. Google (E.D. Va. 2004) which was considered a victory for Google and its advertisers. The GEICO court held that Google's technology that allowed the triggering of ads that did not contain GEICO's marks was "not likely to cause confusion." The GEICO decision was arguably an important factor in Google's rise to prominence via its relentless leveraging of the "money machine" contained within its AdWords program. Ads that are identified as to "source" and do not use a competitor's mark are apparently OK and will not cause the "consumer confusion" that triggers liability.

However, this was not the end of the story as the continuing battle between Google & American Blind indicates. That said, on August 31, 2007 Google entered into a settlement agreement with American Blind and many commentators, including Eric Goldman, view this as a "stunning victory for Google." Clearly, keyword advertising is (apparently) here to stay. This settlement, wherein Google paid no damages and American Blind is arguably the worse off, should dissuade future  plaintiffs from pursuing similar suits. This result (despite no holding) is not surprising given the important role search and keyword advertising now play in the global economy. It may in fact help clear the way for the next wave of growth.

It may be premature to consider the legal issue at the intersection of trademark doctrine and online advertising completely settled, although it is hard to imagine a scenario where a future holding could go the other way, especially if Google continues to adhere to its current AdWords trademark policy. But, hard to imagine does not mean impossible. It is likely that American Blind is simply not the "deep pocket" plaintiff that has the staying power to see this type of litigation (spanning four years) all the way through to conclusion (i.e. a jury trial on the issue). The U.S. Supreme Court has not spoken on the issue and a powerful interest may yet persuade it to hold in its favor, but the odds are against it. Many powerful interests are themselves users of AdWords and this may be another example of where the marketplace is leading the law.

The Federal Trade Commission (FTC) Regulations & Other Applicable Law

Many FTC regulations apply to the "brick and mortar" world as well as to the world of online advertising. FTC policy supports competitor "brands" used in comparative advertising as long as the appropriate disclosures are provided and the advertising is "truthful, non-deceptive and clear." The FTC website contains useful information regarding how its policies apply to online advertising but, as with all websites, some of the information is dated. In addition, as mentioned in What Law Controls? state law regarding unfair competition is also applicable.

The "law of the Internet" is a misnomer since many (if not most) laws that regulate business activity apply online. There is simply not much of a distinction that is warranted except for the nuances related to the context. It is these nuances that make "Internet Law" a separate and distinct practice area, more so than controlling doctrine.

Trademarks, unlike copyright, must be used and maintained in order to retain the "bundle of rights" associated with them. This section discusses trademark  "use" and the enforcement of trademark rights.

The Requirement of Proper Use

Section 1127 defines "use in commerce" as follows:

§ 1127. Construction and definitions; intent of chapter

The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce—

(1) on goods when—
(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and
(B) the goods are sold or transported in commerce, and
(2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.

Comments: Not only is "use in commerce" required for registration, but the mark must remain in continuous use or there is risk that it may be deemed "abandoned." As indicated below, "non use for 3 consecutive years shall be prima facie evidence of abandonment." Section 1127 defines "abandonment" as:

§ 1127. Construction and definitions; intent of chapter

A mark shall be deemed to be “abandoned” if either of the following occurs:

(1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. “Use” of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.
(2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark. Purchaser motivation shall not be a test for determining abandonment under this paragraph.

Comments: It should also be clear from the definitions above that there is a particular kind of use that the statute requires. In the case of products, the mark must be "affixed" on displays, or containers or on tags and labels. For services, the mark must be used in advertising or sale of said services. In other words, on artifacts delivered (e.g. work product) or in media used to "get the word out." In addition, sellers must take precautionary measures that the mark (i.e. in the case of a word mark) be used as an adjective that identifies a "source" as opposed to a noun (or verb) that is used to describe a product/service category in general (or an "action" that is disassociated from the seller). In short, there is a requirement of "specific acts" on the part of the seller in order to maintain the bundle of rights. This does not imply that every minor inappropriate use need be litigated, but rather, that there is evidence that the seller intends to enforce its rights to have the mark continue to represent the specific brand in question.

Enforcement of Trademark Rights

Section 1125 provides the various "theories" that can be used to bring an action under the statute. For example, section 1125(a) provides for the following general theory under which a civil action may be brought:

§ 1125. False designations of origin, false descriptions, and dilution forbidden

(a) Civil action
(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—
(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

Comments: Section 1125(b) provides a trademark holder a theory under which an action can be brought to prevent the importation of goods that are in contravention of the statute. Section 1125(c) provides "remedies for the dilution of famous marks" and 1125(d) provides liability in the case of specified "cyberpiracy" (also see section 1129 "Cyberpiracy protections for individuals"). The Infringement section discusses the concept of "confusion" and the factors that pertain to its analysis.

Dilution is another theory of infringement (see 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:

Dilution is an injury that differs materially from that arising out of the orthodox confusion. Even in the absence of confusion, the potency of a mark may be debilitated by another's use. This is the essence of dilution. Confusion leads to immediate injury, while dilution is an infection, which if allowed to spread, will inevitably destroy the advertising value of the mark.

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 intent is to] create a federal cause of action to protect famous marks from unauthorized users that attempt to trade upon the goodwill and established renown of such marks, and thereby, dilute their distinctive quality. ... The bill defines the term "dilution" to mean "the lessening of the capacity of a famous mark to identify or distinguish famous goods or services regardless of the presence or absence of (a) competition between the parties, or (b) likelihood of confusion, mistake or deception." Thus, for example, the use of DUPONT shoes, BUICK aspirin, and KODAK pianos would be actionable under this legislation.

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 Moseley 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:

Noting that consumer surveys and other means of demonstrating actual dilution are expensive and often unreliable, respondents and their amici argue that evidence of an actual "lessening of the capacity of a famous mark to identify and distinguish goods or services," §1127, may be difficult to obtain. It may well be, however, that direct evidence of dilution such as consumer surveys will not be necessary if actual dilution can reliably be proven through circumstantial evidence--the obvious case is one where the junior and senior marks are identical. Whatever difficulties of proof may be entailed, they are not an acceptable reason for dispensing with proof of an essential element of a statutory violation.

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)).

Fair Use is also covered under Defenses and is best understood when read in the context of the other defenses. It is treated as a separate topic to make it easier to find for those that may want to compare and contrast the doctrine under trademark with its analog under copyright. They are not the same, although at times both commentators and courts talk in terms that would make you believe otherwise, the devil is always in the details and therefore let that serve as an introduction to the editorial rant that follows.

What exactly is "fair use" under trademark doctrine? Before attempting to answer this question it may be worthwhile to take a moment to reflect. The law has often been called a "system of communication" (e.g. like TCP/IP but not as efficient). In order to understand what is being said you must understand the protocol, the links and the feedback loop. It may sound like English, but often it is not. At least not the kind English supported by dictionaries. It is a kind of English only supported by the case law. To understand what something means you must understand the cases, that is the price of admission. There is a movement (of sorts) to cut through this morass (to the degree possible) and provide the masses a view behind the curtain. Some call it "interdisciplinary work" others call it "open source law." It is basically an attempt to explain, more or less in plain terms, what the protocol means so that "ordinary" people understand. That is the objective behind the "tutorials." It is an attempt at a kind of "news you can use." They may fall short of the mark, but that is the intent. Therein lies both the benefit and the danger. That is why "tutorials" (from any source) can never be interpreted as legal advice (see our Terms of Use). The legal protocol requires precision and it is exactly that which is often lost in translation.

Fair use, as a defense in the trademark sense, is limited to a narrow meaning best exemplified in the case of Zatarain's v. Oak Grove Smokehouse (5th Cir. 1983). Here the argument was over the trademark "Fish-Fri" owned by Zatarain. The court explains the use of the defense as follows:

Although Zatarain's term "Fish-Fri" has acquired secondary meaning in the New Orleans geographical area, Zatarain's does not now prevail automatically on its trademark infringement claim, for it cannot prevent the fair use of the term by Oak Grove and Visko's. The "fair use" defense applies only to descriptive terms and requires that the term be "used fairly and in good faith only to describe to users the goods or services of such party, or their geographic region." (quoting U.S.C. section 1115(b)(4)). The district court determined that Oak Grove and Visko's were entitled to fair use of the term "fish fry" to describe a characteristic of their goods; we affirm that conclusion.

Zatarain's term "Fish-Fri" is a descriptive term that has acquired secondary meaning in the New Orleans area. Although the trademark is valid by virtue of having acquired secondary meaning, only that prenumbra or fringe of secondary meaning is given legal protection. Zatarain's has no legal claim to an exclusive right in the original, descriptive sense of the term; therefore, Oak Grove and Visko's are still free to use the words "fish fry" in their ordinary, descriptive sense, so long as such use will not tend to confuse customers as to the source of the goods.

But the excerpt above begs the question how much use by competitors might indeed lead to confusion? That is left for another link in the chain to determine. Notice however, that the court in Mattel  (see Defenses|Parody) used the phrase "nominative fair use." Were they referring to what 5th Circuit was talking about in Zatarain? No, despite the fact that "fair use" was part of the holding. The cases mean what the cases mean, nothing more. In order not to lose track of "Waldo" you must keep in mind a quote by Supreme Court justice Oliver Wendell Holmes: “the law is not something to be derived from a set of axioms via the power of deductive reasoning, but rather the law is ultimately whatever a court says that it is.”

Section 1051(a) (see below) contains the basic requirements for the registration and verification of a mark. It is should be made clear however (see What constitutes a mark?) that the selection of an appropriate mark is a process that requires a significant amount of due diligence if problems are to be avoided going forward. In general, the selection of a "fanciful" mark will prove to be less problematic, but in any case a trademark search must be conducted in order to ensure that (to the degree possible) the mark selected is not "confusingly similar" to another in its designated class. In addition, many Internet sites are likely to be ambitious enough to want to do business both nationally and internationally (at least many will not want to rule out the latter). In this case a trademark search will need to be conducted not only with the USPTO (and other state and common law sources) but, in addition, an international search will be required as well.

§ 1051. Application for registration; verification

(a) Application for use of trademark

(1) The owner of a trademark used in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the Patent and Trademark Office an application and a verified statement, in such form as may be prescribed by the Director, and such number of specimens or facsimiles of the mark as used as may be required by the Director.

(2) The application shall include specification of the applicant’s domicile and citizenship, the date of the applicant’s first use of the mark, the date of the applicant’s first use of the mark in commerce, the goods in connection with which the mark is used, and a drawing of the mark.

(3) The statement shall be verified by the applicant and specify that—
(A) the person making the verification believes that he or she, or the juristic person in whose behalf he or she makes the verification, to be the owner of the mark sought to be registered;
(B) to the best of the verifier’s knowledge and belief, the facts recited in the application are accurate;
(C) the mark is in use in commerce; and
(D) to the best of the verifier’s knowledge and belief, no other person has the right to use such mark in commerce either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods of such other person, to cause confusion, or to cause mistake, or to deceive, except that, in the case of every application claiming concurrent use, the applicant shall—
(i) state exceptions to the claim of exclusive use; and
(ii) So specify, to the extent of the verifier’s knowledge—
(I) any concurrent use by others;
(II) the goods on or in connection with which and the areas in which each concurrent use exists;
(III) the periods of each use; and
(IV) the goods and area for which the applicant desires registration.

Comments: Remember that a mark is not "acquired" via the registration process but is rather acquired via "use." Registration is a process (both nationally and internationally) that enhances the rights of the holder. The USPTO maintains two trademark registers, a "Principal Register" and a "Supplemental Register." Most of the advantages of registration are obtained via registering in the Principal Register. Some of these advantages include: (1) nationwide priority (protection in the entire U.S.); (2) incontestability (provides protection against certain kinds of attack after a set period of time); (3) right to sue in federal court; (4) recovery of money damages (possibly treble damages & attorney's fees); (5) protection from inappropriate importation and more.

Comments: It is also important to remember that the lack of due diligence with respect to an adequate trademark search could prove to be quite costly (see International Star Class Yacht Racing Association v. Tommy Hilfiger U.S.A., Inc.,  (2d Cir. 1996) and the related analysis here). That said, neither the USPTO or the Lanham Act require a trademark search, however, the courts (as in Hilfinger) may use lack of search as evidence relevant to "bad faith" infringement.

As is true with respect to other tutorials, this is just a "smattering" of representative cases.  The idea is to provide a brief one or two sentence summary of the holding/rule and then to point to the full text of the opinion where available. The focus here will be on Internet cases of note and non-Internet cases, which provide "foundational" precedent. The warning sounded below is the same one issued in the section on Copyright Case Law and applies here perhaps to an even more significant degree.

As practical consideration, please take note that many of the cases have "big name" plaintiffs and defendants. This is indicative of the "big time litigation" (read dollars) that are associated with these kinds of cases. These are not waters where small to medium size e-businesses want to swim in, nor most large businesses for that matter. It is clear that compliance is the "low risk" strategy. Any other strategy may lead to gray and murky waters.

Requirements

Case: Blue Bell v. Farah Manufacturing (5th Cir. 1975)
Summary: Mere adoption of a mark without bona fide use in commerce, in an attempt to reserve if for the future, will not create trademark rights. [full text]

Case: Abercrombie & Fitch v. Hunting World Incorporated (2d Cir. 1976)
Summary: A generic word  (e.g. “safari”) can not be used as a trademark with enforceable rights if it has come to represent (through usage) a name for generic type of product. [full text]

Case: Zatarain's v. Oak Grove Smokehouse (5th Cir. 1983)
Summary: An owner of a descriptive mark cannot prevent competitors from using general descriptive terms where there is no confusion. [full text]

Case: Park 'N Fly v. Dollar Park and Fly (USSC 1985)
Summary: The holder of a registered mark may rely on incontestability to enjoin infringement and such action may not be defended on the grounds that the mark is merely descriptive. [full text]

Case: Zazu Designs v. L'Oreal (7th Cir. 1992)
Summary: More than nominal use in commerce is required for an unregistered mark. [full text]

Case: Two Pesos, Inc. v. Taco Cabana (USSC 1992)
Summary: Proof of secondary meaning is not required to prevail under the Lanham Act where the trade dress at issue is inherently distinctive. [full text]

Case: Qualitex v. Jacobson Products Co. (USSC 1995)
Summary: If certain conditions are met, a color will meet ordinary legal trademark requirements. [full text]

Case: International Star Class Yacht Racing Association v. Tommy Hilfiger U.S.A., Inc.,  (2d Cir. 1996)
Summary: Lack of due diligence with respect to trademark search is relevant to bad faith infringement. [full text]

Case: Walmart Stores v. Samara Brothers  (USSC 2000)
Summary: In an infringement action regarding unregistered trade dress under the Lanham Act, a product's design is distinctive, and therefore protectible, only upon a showing of secondary meaning. [full text]

Infringement

Case: AMF v. Sleekcraft Boats (9th Cir. 1979)
Summary: When goods are related, but non-competitive, other factors must be considered as part of the "likelihood of confusion" calculus. [full text]

Case: The New Kids On The Block v. News America Publishing, Inc. (9th Cir. 1992) 
Summary: Nominative use of a mark is 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. [full text]

Case: Shields v. Zuccarini (3d Cir. 2001)
Summary:   Liability is triggered under the ACPA if: (1) the mark in question is a distinctive or famous mark entitled to protection; (2) the defendant registered domain names that are "identical or confusingly similar to" the plaintiff's mark; and (3) the defendant registered the domain names with the bad faith intent to profit from them. [full text]

Case: Moseley v. V Secret Catalogue, Inc. (USSC 2003)
Summary: Evidentiary requirements must be met in order to show dilution under the FTDA. [full text]

Case: Playboy v. Netscape (9th Cir. 2004)
Summary: Unlabeled banner ads will trigger liability under the doctrine of "initial interest confusion." [full text PDF]

Case: GEICO v. Google (E.D. Va. 2004) 
Summary: Triggering of ads via search technology that do not contain a competitor's marks is not likely to cause confusion. [full text PDF]

Case: 1-800 Contacts v. WhenU.com (2d. Cir. 2005) 
Summary: Liability is not triggered when there is "non-trademark use" of a mark. [full text PDF]

Defenses

Case: Bayer Co. v. United Drug Co. (S.D.N.Y. 1921) 
Summary: The word "Aspirin" cannot be protected as a trademark against seller's targeting the general public (because it is now generic) but retains it trademark rights within the "chemist industry." [full text]

Case: The Murphy Door Bed Co. v. Interior Sleep Systems (2d Cir. 1989) 
Summary: Policing a mark may be of no consequence with respect to determining whether or not it has become generic. [full text]

Case: Major League Baseball Properties v. Sed Non Olet Denarius (S.D.N.Y 1993)
Summary: A mark may be abandoned where there is non-use and no intent to resume use, even if the mark maintains some historical significance. Trademark doctrine does not allow for the "warehousing" of a mark.[]

Case: TrafFix Devices v. Marketing Displays (USSC 2001)  
Summary: A product design (i.e. trade dress) may be functional because it is "essential to the use or purpose of the article" or "affects the cost or quality of the article." Functionality is not protected under trademark doctrine. [full text]

Case: Mattel v. MCA Records (9th Cir. 2002)
Summary: Parody may be considered "nominative fair use" and does not trigger liability. [full text]

Remedies

Case: Big O Tire Dealers v. The Goodyear Tire & Rubber Company (10th Cir. 1977)
Summary: Reverse confusion can trigger liability and compensation based on FTC guidelines for corrective advertising may be warranted. []

Case: Lindy Pen Company v. Bic Pen Corporation (9th Cir. 1993)
Summary: A plaintiff must proffer some proof regarding actual damages, or in the alternative, unjust enrichment, upon which a court may award compensation. []

While there are systems in place that facilitate the registration of a mark internationally with a single filing, there is no global trademark law. Trademarks are protected by the national laws of treaty signatories, although the TRIPS agreement (see below) does provide an attempt of at least minimalist harmonization. The two principal treaties regarding international trademarks are the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Madrid Protocol. Both are discussed briefly below and links are provided for further reading.

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

TRIPS is administered by the World Trade Organization (WTO). The WTO maintains a significant amount of relevant information regarding this agreement on its website and the "gateway" to additional TRIPS information can be found here. TRIPS contains content that is much broader than trademarks, including copyright, patents, industrial design and trade secrets. The following excerpt from the WTO TRIPS website is informative.

Ideas and knowledge are an increasingly important part of trade. Most of the value of new medicines and other high technology products lies in the amount of invention, innovation, research, design and testing involved. Films, music recordings, books, computer software and on-line services are bought and sold because of the information and creativity they contain, not usually because of the plastic, metal or paper used to make them. Many products that used to be traded as low-technology goods or commodities now contain a higher proportion of invention and design in their value — for example brandnamed clothing or new varieties of plants.

Creators can be given the right to prevent others from using their inventions, designs or other creations — and to use that right to negotiate payment in return for others using them. These are “intellectual property rights”. They take a number of forms. For example books, paintings and films come under copyright; inventions can be patented; brandnames and product logos can be registered as trademarks; and so on. Governments and parliaments have given creators these rights as an incentive to produce ideas that will benefit society as a whole.

The extent of protection and enforcement of these rights varied widely around the world; and as intellectual property became more important in trade, these differences became a source of tension in international economic relations. New internationally-agreed trade rules for intellectual property rights were seen as a way to introduce more order and predictability, and for disputes to be settled more systematically.

A foundational part of the TRIPS agreement is the concept of National Treatment. Essentially this requires that foreign nationals be treated the same as "locals" once goods have entered the country (i.e. national laws apply to foreigners in a manner analogous to how a nation's laws applies to its own citizens). This does not mean that the same laws apply everywhere. That said, TRIPS does make an attempt to provide a minimal set of "common ground rules" by incorporating minimum standards from the Paris Convention and the Berne Convention. The full text of the agreement can be found here in outline format.

The trademark related aspects of TRIPS are contained in Articles 15-24 (which includes the language related to "geographical indications). These Articles can be found in their entirety starting here. The subject matter that is protected is found in Article 15 and contains the following language:

Article 15
Protectable Subject Matter

1. Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination of such signs, shall be eligible for registration as trademarks. Where signs are not inherently capable of distinguishing the relevant goods or services, Members may make registrability depend on distinctiveness acquired through use. Members may require, as a condition of registration, that signs be visually perceptible.

2. Paragraph 1 shall not be understood to prevent a Member from denying registration of a trademark on other grounds, provided that they do not derogate from the provisions of the Paris Convention (1967).

3. Members may make registrability depend on use. However, actual use of a trademark shall not be a condition for filing an application for registration. An application shall not be refused solely on the ground that intended use has not taken place before the expiry of a period of three years from the date of application.

4. The nature of the goods or services to which a trademark is to be applied shall in no case form an obstacle to registration of the trademark.

5. Members shall publish each trademark either before it is registered or promptly after it is registered and shall afford a reasonable opportunity for petitions to cancel the registration. In addition, Members may afford an opportunity for the registration of a trademark to be opposed.

The TRIPS agreement is arguably the most important international agreement dealing with intellectual property (IP) law among the largest nations (and many smaller ones) and is a cornerstone agreement that underpins the global economy. It will likely continue to maintain its prominence as IP represents more and more of the GDP of both the developed and the developing world. Trademark protection outside of the  holder's national borders will an remain an important issue on the world economic stage as the Internet increasingly drives the creation of additional global brands.

Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol)

This is an international treaty that allows a trademark holder to seek registration in any of the signatory countries by filing a single application. The "international registration" that results provides protection in member countries but each signatory determines how the mark will be protected (i.e. via its own national laws) within the jurisdiction. This treaty is administered by the World Intellectual Property Organization (WIPO). A current list of signatories can be found here.

The U.S. became a signatory on November 2, 2003 which provides nationals to submit an international application to the USPTO which it then forwards to  to the International Bureau in Geneva, Switzerland. The Lanham Act was amended to implement the Madrid Protocol. This amendment is known as the Madrid     Protocol Implementation Act (MPIA). The USPTO summarizes the requirements for filing an international application as follows:

What are the requirements for submitting an international application through the USPTO?

To file an international application through the USPTO, an applicant must have a U.S. application, called a "basic application" or a U.S. registration, called a "basic registration." The mark and the owner of the international application must be the same as the mark and the owner of the basic application or registration. The international application may be based on more than one USPTO application or registration provided the mark and the owner are the same for each basic application and/or registration.

The international application must include a list of goods and services that is identical to or narrower than the list of goods or services in the basic application or registration. The international applicant must pay the U.S. certification fee(s) at the time of submission and identify at least one Contracting Party in which an extension of protection (that is, registration in a Contracting Party) is sought.

A list of the minimum requirements for obtaining a date of receipt of an international application in the USPTO is set forth in 37 C.F.R. §7.11(a). See notice of final rules published in the Federal Register, 68 FR 55748 (Sept. 26, 2003), and posted on the USPTO web site at: http://www.uspto.gov/web/offices/com/sol/notices/68fr55748.pdf.

The requirements for a complete international application are set forth in Article 3 of the Protocol and Rule 9 of the Common Regulations Under the Madrid Agreement Concerning the International Registration of Marks and the Protocol Relating to That Agreement (Common Regulations). The Common Regulations are currently available on the WIPO website at http://www.wipo.int/madrid/en/.

The entire USPTO FAQ regarding the Madrid Protocol can be found here. Prior to the systematic adoption of this protocol it simply was not possible to obtain an "international trademark" with a single filing. The increased pressure for a single filing system was apparently driven by international players insisting on a more uniform approach. In any case, the protocol is indicative of the fact that the world is indeed becoming "flat" and the trend toward globalization shows an increasing ability to overcome any friction that stands in its way.