Trademark Basics. Presented by: Roberta Jacobs-Meadway, Esq. Eckert Seamans Cherin & Mellott, LLC

Transcription

1 Trademark Basics Presented by: Roberta Jacobs-Meadway, Esq. Eckert Seamans Cherin & Mellott, LLC

2 Trademark Myths You can t use some one else s trademark and no one can use your trademark Once you get a trademark it is yours Once you get a trademark registration it is yours

3 Trademark Myths-Con t I can license and assign my trademark wherever and however I want If I have registered the URL I have the right to use it If I have registered a trade name or corporate name, I can use it

4 Intellectual Property Term of Protection - generally Trademarks - Protected as long as in use - Use for purposes of establishing rights is not the same as use sufficient to support registration of a mark - Protection is available whether or not there is registration Copyrights - ninety five years (or life of author plus 70 years) - Protection exists but no enforcement without registration (or, in some cases, without application for registration

5 Terms of Protection-Con t Patents- twenty years from filing date -Must have issued patent -There are no common law patent rights Design Patents - fourteen years from issue -Must have issued patent Trade secrets -so long as maintained in secret -public filing would be antithetical to secrecy

6 Intellectual Property Subject Matter generally Trademarks indicia of origin that are not merely descriptive or functional or ornamental Copyrights works of authorship that are original and fixed in a tangible form Patents inventions which are new, useful and nonobvious Design Patents the ornamental aspect of useful articles Trade Secrets any proprietary information possession of which provides a commercial advantage to the holder

7 Trademarks The Subjects of Trademarks Words-Apple Phrases- We Try Harder Symbols-Nike swoosh package dress/get up-snickers label package configuration-coke bottle Colors-blue Tiffany boxes Sounds-NBC Chimes Smells-strawberry scented yarn

8 Trademarks What Can Not Be The Subject of Trademark Rights Descriptive words, terms with no acquired distinctiveness - surnames (McDonalds) - geographic designations (Philadelphia) Generic words, phrases (Aspirin, foot long) Titles of single works (Ebay for Dummies vs. for Dummies)

9 Trademarks-Con t Functional attributes of products or packages-color of coated abrasives Mere ornamentation, background designs--t-shirt art Damn I m good and Sorry Boys, I only date Rock Stars Exceptions secondary source significance (sports team logo on cap) secondary meaning (BoddegaVeneta, basket weave pattern

10 Trademarks (cont d) Certain words and symbols subject to special protections - Olympic - The American flag - Famous marks protected from dilution Note: Trade names and domain names are not trademarks, but the same term can function as a trademark or as a trade name, or as a domain name, depending on how it is used.

11 Trademark Rights Can Overlap With Other Intellectual Property Rights Logo of Superman character in particular pose can be subject of both copyright and trademark protection, if used as a trademark Bottle designs for alcoholic beverages and perfumes can be protected by design patent and as a trademark and there may also be elements protected by copyright Image of Elvis Presley can be protected under the Lanham Act, by copyright, and by right of publicity.

12 Proper Use of Trademarks Trademarks are used on the goods or the packaging for the goods or on point of sale displays; service marks are used on advertising and informational materials Trademarks (and service marks) are adjectives, not nouns Trademarks should be used consistently Note there is a concept of fluid trademarks Permitted use of trademarks by third parties should be subject to the owner s control, subject to the first sale doctrine

13 Acquisition of Trademark Rights First In Time As First In Right Common Law Rights Trademark use of an inherently distinctive term creates rights in the geographic area within which the mark is used and known - issue: geographic scope of rights

14 Acquisition of Trademark Registered Rights Rights (cont.) Filing of an application on an intent-to-use basis provides a constructive date of first use on a nation-wide basis contingent on registration issuing on the Principal Register. Note: An intent to use application filed with no bona fide intent to use is void. An inability to document steps taken to effect use will doom a challenged application if the applicant has no experience in the claimed field of use. Registration will not issue until mark is used in commerce and proof of use is filed and accepted in USPTO

15 Acquisition of Trademark Rights-Con t Exception: non-u.s. applicants can secure registration based on non-u.s. registrations provided there is a bona fide intent to use the mark in the U.S. Also, a non-u.s. applicant can secure benefit of earlier foreign date if the U.S. application is filed within six months and can secure registration without use of the mark in the U.S. Note: use is required to avoid a claim of abandonment and to maintain the registration.

16 The Trademark Registration Process Applications are generally filed on the basis of use in commerce or a bona fide intent to use. The application must identify the goods and/or services on or in connection with which the mark is used or intended to be used. Once an application is filed, the list of goods and services can not be expanded; it can only be narrowed or clarified The application must identify the mark in which rights are claimed.

17 The Trademark Registration Process (cont.) A design element can not be deleted or modified or added if it changes the commercial impression of the mark as a whole. If an application is filed on the basis of use, a specimen showing such use is submitted and dates of first use are claimed. In a use based application, the dates of use can be corrected, but the mark must have been in use when the application was filed. It is possible to amend the basis for filing an application.

18 Trademark Ownership As between a manufacturer and distributor, absent an agreement, the manufacturer is presumed to be the owner. Creating a mark creates no tm rights rights come from use on specific goods/services The owner of the trademark is the entity that controls the nature and extent of the use of the mark. Ownership issues recently who owns restaurant mark owner of property or lessee who operates the restaurant?

19 Trademark Ownership (cont.) An application filed on the basis of intent to use can not mature to registration until a declaration of use is filed with a specimen showing such use, and is accepted by the USPTO. A registration can not be maintained for goods for which there is no use even if the mark is in use on other goods.

20 Issues In Trademark Ownership A trademark is said to indicate a single source. so two unrelated entities cannot each own the same mark for the same goods in the same market. but a trademark may be owned by a joint venture or two individuals as well as by a business entity or individual What is important is unity of control

21 Trademarks Use Them (Properly) or Lose Them Avoid genericide-rights in mark can be lost There are 2 Rs in XEROX " Band-Aid brand adhesive bandages Avoid abandonment abandonment can be done intentionally - non-use with intent not to resume

22 Trademarks Use Them (Properly) or Lose Them (cont.) Abandonment can happen unintentionally Licensing without quality control Assignment in gross - Assigning rights in a mark without the goodwill associated with the mark. Transitioning to a new product without filing an application to cover the new use. Recent issue: should company be able to upgrade registration by amending goods if function is same but form is different and not have to file a new application when original registration identifies video tapes and the format has changed over time. Transitioning to a different form of the mark.

23 Issues In Trademark Licensing License estoppel does not preclude a third party challenge to rights based on naked licensing A licensee has no standing to bring an action for infringement of a registered trademark under the Lanham Act An exclusive Licensee has standing to bring an action for unfair competition in the nature of trademark infringement under 15 U.S.C. 1125(a) Marks can be licensed for so long as licensor controls nature and extent of use of the mark

24 Examination of Trademark Applications A mark may initially be refused registration on any of the grounds set out in 15 USC 1052(a)-(e) including:

25 Examination of Trademark Applications (cont.) 1. the mark is generic 2. the mark fails to function as a trademark 3. the mark is merely descriptive 4. the mark is deceptive 5. the mark is confusingly similar to a mark previously registered and applied for 6. the matter claimed as a mark is functional 7. the mark is immoral or scandalous (HEBE)

26 Prosecuting The Application Assuming an initial refusal of registration issues (or an initial refusal of declaration of use) the applicant can: - amend the application to address the issue - present argument and evidence against the refusal - TMEP as a guide for responding Assuming response is not accepted or is accepted only in part, applicant may request reconsideration of a final refusal and/or file an appeal within six months of a final refusal Ex parte appeals are taken to the Trademark Trial and Appeal Board

27 Opposition Proceedings Once an application for registration of a mark is allowed, the mark is published in the OGT There is a 30-day period from the date of publication (which may be extended) for anyone with standing and grounds to oppose issuance of the registration If a notice of opposition is timely lodged, and the fee is paid, the Trademark Office will institute the proceeding

28

29 Cancellation Proceedings Can be instituted within five (5) years of date of issue of registration on same grounds as would support an opposition After five (5) years, grounds for cancellation no longer include descriptiveness, but still include abandonment, genericy, fraud, deceptiveness, functionality.

30 Scandalous/Disparaging/ Vulgar Marks

31 Scandalous/Disparaging Marks A trademark will not be permitted registration if it consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.

32 Scandalous/Disparaging Marks Is the Mark Disparaging? Would the mark be understood, in its context, as referring to an identifiable group of people? May that reference be perceived as disparaging to a substantial composite of that group? Does the Mark Involve an Identifiable Group? The dictionary definition of the term; The relationship of the term and other elements of the mark; The type of product upon which the mark appears; and How the mark will appear in the marketplace. Scandalous: shocking to the sense of propriety, offensive to the conscience or moral feelings or calling out for condemnation. Encompasses matters that are "vulgar," - lacking in taste, indelicate, morally crude.

33 Scandalous/Disparaging Marks Examples: Disparaging REDSKINS for Football team THE SLANTS for an Asian-American band Scandalous COCK SUCKER for a rooster shaped lollipop

34 Scandalous/Disparaging Marks First Amendment Issue? Does refusingregistration for scandalous or disparaging marks violate a person s First Amendment Right? Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. US CONST Amend. I A statute is presumptively inconsistent with the First Amendment if it imposes a financial burden on speakers because of the content of their speech Simon & Schuster, Inc. v. Members of New York State Crime Victims Bd., 502 U.S. 105, 115, 112 S. Ct. 501, 508, 116 L. Ed. 2d 476 (1991)

35 Inter Parte Proceedings Before The Trademark Trial and Appeal Board TTAB proceedings look much like litigations in the courts except: 1. The Board deals only with issues of right to trademark registration, not right to use. Note issues of right to registration can revolve around issues of ownership and priority 2. The Board cannot award monetary sanctions, damages or fees. 3. Trial is on the papers, testimony taken by deposition, and other evidence submitted by notices of reliance.

36 Inter Parte Proceedings Before The Trademark Trial and Appeal Board (cont.) 4. The parties can agree to an Accelerated Case Resolution (ACR) where they can limit discovery, limit the evidence presented at trial, and submit the case for decision in a manner similar to summary judgment, except the TTAB will resolve disputed issues of fact and issue its opinion on an expedited basis.

37 Appeals From Decisions of the TTAB in Inter Partes Proceedings There are two routes for appeal: 1. To the Court of Appeals for the Federal Circuit on the record below. 2. To a District Court where the parties can introduce new evidence and raise additional issues; including infringement, and can seek additional relief (injunction/damages).

38 Appeals Statistics Over the last 2 years, appeals from the TTAB: Sept Sept. 2014: 12 appeals to U.S. District Courts and 1 appeal to the CAFC Sept Sept. 2013: 9 appeals to the U.S. District Courts and 8 appeals to the CAFC

39 Difficulty in Enforcing Trademark Rights Patent holder's willingness to license its patents, and lack of commercial activity in practicing patents, do not, by themselves, establish that holder would not suffer irreparable harm if permanent injunction against infringing party did not issue. ebay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S. Ct. 1837, 164 L. Ed. 2d 641 (2006) Party seeking preliminary injunction and must demonstrate that irreparable harm is likely. Courts have held this same rule applies to Trademarks

40 Difficulty in Enforcing Trademark Rights Ferring Pharm., Inc. v. Watson Pharm., Inc., (2014) Injunctive relief is an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief. A party seeking a preliminary injunction in a Lanham Act case is not entitled to a presumption of irreparable harm but rather is required to demonstrate that she is likely to suffer irreparable harm if an injunction is not granted. Defendant not entitled to preliminary injunction; competitor's paid consultant certified to court that he would not make statement in the future that company's prescription progesterone products contained warning showing efficacy had not been demonstrated with patients 35 years of age and older, and statement was removed from subsequent webcast, no evidence that allegedly false statements were still available to consumers, and there was no evidence that there was any risk that any representative of competitor would make such statements, especially since competitor conceded that certain statements were inaccurate, and that all of the statements were made by consultant.

41 Difficulty in Enforcing Trademark Rights Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc (2011) Non-profit corp. who provide healthcare information to patients and physicians in Arab and Muslim world via radio, television, etc. brought TM infringement action against medical news organization. Sought preliminary injunction. Injunction granted by district court. [Plaintiff s] subsequent delay in seeking injunctive relief along with the minimal likelihood of a qualitatively new harm arising from those revisions, precludes [Plaintiff] from enjoying the benefit of a presumption of irreparable harm. Overturned district court; Denied injunction.

42 Difficulty in Enforcing Trademark Rights Sound Surgical Technologies, LLC v. Leonard A. Rubinstein, M.D., Preliminary Injunction Granted Injunctive relief poses no threat of harm to Defendants, as they have effectively admitted that they no right to continued use of the domain names.additionally, an injunction will also serve the public interest by protecting consumers seeking lipoplasty services from confusion as to Plaintiff's affiliation with or sponsorship of Defendants' services.

43 Difficulty in Enforcing Trademark Rights NATIONWIDE PAYMENT SOLUTIONS, LLC, v. PLUNKETT (2010) Preliminary injunction was granted: Plaintiff will suffer irreparable harm absent a preliminary injunction. If Plaintiff is ultimately successful on its claims, some aspects of its damages cannot be easily reduced to money damages, especially damage to the reputation and good will associated with the mark as a result of the likelihood of confusion. Under these circumstances, a finding of irreparable harm is warranted.

44 Difficulty in Enforcing Trademark Rights Aurora World, Inc. v. Ty Inc., (2009) Plaintiff has failed to demonstrated that it has significant reputation or goodwill to protect in that market. The mere fact that [Plaintiff] has spent $225,000 on advertising over almost three years, taken alone, does not prove that it has such an interest. Reebok Loss of sales alone will not support a finding of irreparable injury because acceptance of that position would require a finding of irreparable harm to every plaintiff regardless of circumstances. Similarly, potential loss of market share does not constitute irreparable injury. Preliminary Injunction denied.

45 Fee Shifting Octane Fitness LLC v. Icon Health & Fitness Inc April Supreme Court Ruling: greatly loosened the standard for obtaining attorneys fees on losing patent litigants, Removed requirements that loser's case be exceptional, "objectively baseless" and lodged in subjective bad faith. Now, winners merely need to show the case "stands out from others to get fees.

46 Fee Shifting Romag Fasteners Inc. v. Fossil Inc. et al., 1 month ago: 2 nd Circuit: Connecticut district court refused to extend Octane to trademark cases The Supreme Court was interpreting only the Patent Act and not the Lanham Act in Octane Fitness. As such, the Second Circuit cases interpreting the fee provision of the Lanham Act remain good law and represent binding precedent on this court.

47 Fee Shifting Fair Wind Sailing Inc. v. H. Dempster et al Sept. 4 th, 2013: 3rd Circuit : held Octane Fitness ruling on fee-shifting should apply equally to Lanham Act cases We believe that the court was sending a clear message that it was defining 'exceptional' not just for the fee provision in the Patent Act, but for the fee provision in the Lanham Act as well. Removed any culpability requirement, and replaced it wholly by the discretion of the district court

48 Trademark Infringement Test is likelihood of confusion as to source, sponsorship, affiliation--- factors considered: * similarity of marks * similarity of goods bridging the gap strength of senior user s mark similarity of trade channels similarity of promotional media sophistication of purchase conditions of purchase actual confusion intent of the junior user

49 Trademark Infringement

50 Strength of Marks - functions to expand scope of trademark protection Inherent strength- mark is not merely descriptive Acquired strength- based on: length of use extent of sales extent of advertising impact in market shown by consumer recognition shown by diversion shown by market position absence of significant third party use

51 Strength Of Marks

52 Family of Marks - functions to expand scope of trademark protection key is promotion of family members together key is maintaining consistency in use of family Formative pattern: adjective identifying hair characteristic (BIG) Family formative (SEXY) generic term (HAIR)

53 Trademarks - Registration is not a prerequisite for protection Trademarks are protected under state and common law as well as under federal law Federal Registration provides a number of significant benefits: -Presumption of ownership, validity (not descriptive) -Customs recordal -Constructive notice - Incontestable status -Remedies for counterfeiting

54 Defense To Actions For Infringement Fair use of trademarks classic fair use descriptive terms can be used in their ordinary descriptive sense and not to identify source or sponsorship nominative fair use use of another s trademark to identify the product of the other (compare Wal-Mart brand to ; works with LEGO brand blocks. )

55 Defense To Actions For Infringement Fair Use of Trademarks (cont.) Parody/other miscellaneous uses claimed as fair and not infringing. - taking what is necessary to make the point test for parody: amusing, not confusing - artistic relevance test (Ginger and Fred)

56 7-Eleven: Parody (?)

57 Heineken: Parody (?)

58 Arm & Hammer: Parody (?)

59 Defenses to Action for Infringement Equitable Defenses Statute of limitations laches (may only bar damages) acquiescence estoppel unclean hands/fraud

60 Avoiding Trademark Infringement Due Diligence in acquisition of rights Pre-filing search USPTO Internet Other databases Comprehensive Search: In-house and outside vendors non-u.s. databases

61 Trademark Dilution Dilution doctrine: protects distinctive marks from use of essentially the same term (or a similar term) irrespective of competition or confusion if the use is likely to dilute the distinctiveness of the senior user s mark or tarnish it. -recent 9 th circuit case dilutes this standard Federal Trademark Dilution Protection is restricted to truly famous marks which are in effect household names No recognition for niche fame or marks with local fame

62 Trademark Dilution (cont.) State and Common Law Dilution Protection is generally extended, where it is extended, to distinctive marks with no requirement of fame.

63 Remedies for Trademark Infringement 1. Injunctive Relief mandatory including recall of product prohibitory 2. Damages generally when there is competition or confusion 3. The profits of infringer unjust enrichment 4. Enhanced damages 5. Fees

64 Trademark Counterfeiting Requires registration Remedies apply where counterfeit goods (or packaging for the goods) are those covered by the registration of the mark Penalties include statutory damages

65 Benefits of Trademark Registration on the Principal Register presumption of validity incontestability after 5 years provides constructive notice of exclusive rights availability of Customs recordation serves as basis for non- U.S. registration

66 Trademark Licenses Tips and Traps Why license a trademark? Why accept a license? Most trademark licenses involve willing parties Not all do (resolution of litigation; evidence of litigation)

67 Trademark Licenses Tips and Traps Licensor seeks to extend goodwill into new areas Licensor seeks an income stream

68 Trademark Licenses Tips and Traps Licensee seeks to benefit from licensor s goodwill Licensee seeks to benefit from licensor s efforts Advertising Policing

69 Trademark Licenses Tips and Traps What is a reasonable royalty? Answer: it depends (but 5% seems to be the outcome of various calculations) And what does it depend on?

70 Trademark Licenses Tips and Traps Factors impacting royalty amounts: Investment of licensee advertising efforts new product development Fame of licensed mark Investment of licensor in advertising, copromotion Standard established by licensor Comparables in the industry

71 Trademark Licenses Tips and Traps Obligations of the licensee: Obvious one: payment of royalties Submit to quality control by licensor May be minimum sales obligations May be minimum promotional/advertising obligations May be restrictions on use of marks (e.g. not to be combined with other marks of the licensee)

72 Trademark Licenses Tips and Traps Obligations of the licensor: Exercise quality control Protect brand May be obligations to promote

73 Trademark Licenses Trips and Traps Obligations may be joint or delegated: Policing mark Quality Control Developing product Advertising, promotion

74 Trademark Licenses Tips and Traps Traps to Avoid: Ambiguity as to ownership Ambiguity as to permitted uses of licensed mark Ambiguity as to what is required to be approved Ambiguity as to scope of license Ambiguity as to policing Ambiguity as to consequences of termination/expiration

75 Trademark Licenses Tips and Traps Particular issues and concerns: Joint or composite trademarks Rights of exclusive vs. non-exclusive licensees Impact of territorial issues on licensing schemes License vs. franchise

76 Cases Simon & Schuster, Inc. v. Members of New York State Crime Victims Bd., 502 U.S. 105, 115, 112 S. Ct. 501, 508, 116 L. Ed. 2d 476 (1991) ebay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S. Ct. 1837, 164 L. Ed. 2d 641 (2006) Ferring Pharm., Inc. v. Watson Pharm., Inc., , 2014 WL (3d Cir. Aug. 26, 2014) Voice of the Arab World, Inc. v. MDTV Med. News Now, Inc., 645 F.3d 26 (1st Cir. 2011) Sound Surgical Technologies, LLC v. Leonard A. Rubinstein, M.D., P.A., 734 F. Supp. 2d 1262 (M.D. Fla. 2010) Nationwide Payment Solutions, LLC v. Plunkett, 697 F. Supp. 2d 165 (D. Me. 2010) Aurora World, Inc. v. Ty Inc., 719 F. Supp. 2d 1115, 1169 (2009) Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 188 L. Ed. 2d 816 (2014) Fair Wind Sailing, Inc. v. Dempster, , 2014 WL (3d Cir. Sept. 4, 2014) Romag Fasterners, Inc. v. Fossil, Inc., 3:10CV1827 JBA, 2014 WL (D. Conn. Aug. 14, 2014)