What is Trademark Law and Why is it Important for Your Business?
The purpose of Trademark protection
Producers of “Rolex”, “Mercedes Benz”, and “Louis Vuitton” have put significant effort into creating a name consumers associate with luxury, quality, and reliability. If an inferior product is released in the market with a confusingly similar mark consumers may be duped into buying what they thought was the higher quality product. This hurts the consumer, creates an unreliable marketplace, and allows companies to benefit from the goodwill of another company. This takes profits from the original owner and, if the consumer then associates the inferior quality with that of the original, damages the original mark (and consequently the owner). Trademark law seeks to prevent this situation.
Not paying attention to Trademark law can have serious consequences for your business.
When starting a business, picking a trademark requires careful selection. Picking the ‘wrong’ trademark can leave you unable to protect your mark from the imitation of others or leave you facing a ‘cease and desist’ letter and the possibility of having to forfeit your profits, destroy your product with the infringing mark, and pay damages and attorney fees. 15 U.S.C. §§ 1114–1118; RCW 19.77.150. Either way, the work you put into building your mark may be for not.
Businesses with established marks not in violation of another’s mark are not in the clear. Trademarks can lose their protection when the owner fails to prevent others use of the mark, fails to ensure licensees maintain quality standards, allows their brand to become generic, or abandons the mark. 15 U.S.C. § 1064; RCW 19.77.080.
Consulting an attorney with regard to picking and preserving a trade mark can help prevent this.
What is a trademark?
At its base, a Trademark is simply a “mark” that identifies the source of a good or service. A trademark is defined as any word, name, symbol, or device (or any combination thereof) used to identify goods or services and distinguish them from the goods or service of others. RCW 19.77.010; 15 U.S.C. § 1127. What constitutes a Trademark is very broad, and can include a sound, smell, color or overall look of a product (i.e. trade dress) or any other unique identifier used in advertising or sale, such as a title, designation, slogan, character name, and distinctive feature of radio or television program.
For example, not only does “Nike” count as a trademark, the following are protected Trademarks:
· The color pink for insulation.
· The shape of a coke bottle.
· The scent of sewing thread and embroidery yarn. See In re Clarke, 17 U.S.P.Q.2d 1238 (T.T.A.B. 1990).)
· The overall look of a restaurant. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992).
It is important to note that colors, shapes, or an overall look are not protected by trademark law when such dress is functional, such as a cup that is shaped to improve grip, or when the trade dress gives a competitive advantage, such as a darker colored bottle that helps preserve a beverage. 15 U.S.C. § 1052.
What is required for a valid, protectable Trademark?
A Trademark must be ‘distinctive’ in order to serve the underlying purpose of Trademark law: distinguishing your good or service from others. Trademarks that are Arbitrary, Fanciful, or Suggestive are inherently distinctive. Trademarks that are Descriptive are not inherently distinctive, but may gain protection upon a showing of ‘secondary meaning’; Generic Trademarks, on the other hand, are never distinctive and cannot gain protection under the law. 15 U.S.C. § 1052.
· Arbitrary marks have nothing to do with the product, such as “Nike” shoes or “Apple” brand computers.
· Fanciful marks are completely new marks, such as “Exxon”.
· Suggestive marks require some imagination to connect the mark and the product, such as “Coppertone” for sun tan lotion or the “Roach Motel” for a Roach-killing product.
· Descriptive marks directly describe the underlying product or service, such as “Holiday Inn” or “Golfino” brand golf supplies. Marks are also descriptive when they describe the origin of the goods or use a surname. These marks gain a “secondary meaning” and are protectable when the public has come to associate the mark with a single producer. For example, Philadelphia Cream Cheese is protected because the pubic associates that name with one source. If the mark is misdescriptive, such as “Nantucket” shirts that are not made in “Nantucket”, protection can only be gained if the public will not likely be deceived.
· Generic marks describe the general class the product falls in, such as “soap” for selling soap or “chicken” for selling chicken. This class is not protected for obvious reasons: people need to be able to use the word “chicken” when selling chicken.
Those who want to use or are using your mark may try to invalidate your claim to protection by showing the mark is descriptive without a secondary meaning or by showing it is generic. However, if the mark is registered and exclusively and continuously used for five years, you can be granted “incontestable” status. When a mark is incontestable, the right of the owner to use the mark can only be challenged on the ground that the mark has become generic, is functional, has been abandoned, or infringes a valid right that existed before the date of registration.
15 U.S.C. § 1065; RCW 19.77.020.
What marks are not protected?
There are limitations on what can constitute a protected mark. A Trademark may not be registered if it consists of or comprises:
- Immoral, deceptive, or scandalous matter;
- Matter which may disparage or falsely suggest a connection with persons, living or dead, institution, beliefs, or national symbols, or bring them into contempt or disrepute
- The flag or coat of arms or other insignia of the United States, or of any state or municipality, or of any foreign nation, or any simulation thereof;
- The name, portrait, or signature identifying a particular living individual who has not consented in writing to its registration or, if the individual is a deceased president, without the written consent of the surviving spouse during the life of said spouse;
- A mark that is so similar as to cause confusion with a mark already used with respect to the goods or services of the applicant;
- A mark that is likely to cause dilution of a famous mark by blurring or tarnishment.
15 U.S.C. § 1052; 15 U.S.C. § 1125; RCW 19.77.020.
Common Law protects the first user of a trademarks (the “senior user”) from infringement within the geographical area the mark is actually used. Federal and State law provide for registration of Trademarks and doing so has several benefits:
· Registration creates a presumption of use and constitutes constructive notice in the state or all of U.S., respective to the state or federal register;
· Registration can protect marks not in use when applicant has a bona fide, good faith intention to use the mark in commerce within six months;
· Registration is prima facie evidence that the mark is valid and the registrant owns and has exclusive rights to use the mark;
· After five years of registration, the mark may gain ‘incontestable’ status (see above).
See generally 15 U.S.C. §§ 1051-1057 (b)(1); RCW 19.77.
Unless your mark is ‘famous’, your mark (or a similar mark) can be used by another as long as the product or service they provide is in a different class as yours. For example, Delta is used as a Trademark by Delta Airlines, Delta Faucets, Delta Cribs, and Delta Dental, none of which are owned the same company. Thus, if you make “XYZ” shoes and only shoes, and another company later makes “XYZ” cars, you will not be protected from their use. However, if they tried to make shoe laces or socks, a product that is related to shoes, you may be able to prevent their use of the mark. This is designed to protect businesses that are likely to expand into a similar trade while allowing others to use a similar mark in certain circumstances.
Famous marks have additional protections and benefits – they can prevent others from using their mark when there is a likelihood of dilution by blurring or tarnishment. 15 U.S.C. § 1125. A mark is famous when it is “widely recognized by the general consuming public of the United States as a designation of source of the goods or service of the mark’s owner.” Id. Dilution by blurring occurs when a mark or trade name similar to a famous mark impairs the distinctiveness of the famous mark. Id. For example, McDonalds has prevented the use of the name McDentist for a dental office and Starbucks has prevented the use of the name StarBarks for a dog daycare. Dilution by tarnishment occurs when a similar mark or trade name harms the reputation of the famous mark. Id. For example, Victoria’s Secret successfully stopped the use of the name “Victor’s Little Secret” for an adult-novelty store.
Defenses to infringement and dilution – Fair Use.
Not all use of another’s mark is infringement. Such use is acceptable when the defense of fair use applies, which extends to the use of another’s mark for comparative purposes, news, or parody. 15 U.S.C. § 1114. When using another’s mark for the purpose of comparing your product, the use is only allowable to the extent reasonably necessary to serving the purpose. Using another’s trademark for the purposes of parody is also acceptable only when the subject of the parody is the underlying mark itself. See, e.g., Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (9th Cir. 2002) (defense of parody applied to “Barbie girl” song by aqua).
This information is merely a brief introduction to the complexities of Trademark law. For example, understanding what constitutes ‘infringement’ or ‘confusingly similar’ requires a nuanced analysis involving many factors and case law. Also, treaties have imposed small exceptions to general rules, which further complicates the matter.
Your Trademark is a representation of your company and a critical part of every business’s success. Consulting an attorney experienced in Trademark law can help you pick a protectable Trademark and maintain that protection. As the old adage goes: an ounce of prevention is worth a pound of cure. The attorneys at Wolff, Hislop & Crockett have years of experience in helping clients with all related business matter including the selection and preservation of Trademarks. Contact us today for a consultation.