Iowa. McKee, Voorhees & Sease, P.L.C.* Des Moines, IA Last Updated: January A. State Trademark Registration Statute

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1 Last Updated: January 2018 Iowa McKee, Voorhees & Sease, P.L.C.* Des Moines, IA A. State Trademark Registration Statute 1. Code Section The registration of a trademark in Iowa is governed by Chapter 548 of the Iowa Code entitled Registration and Protection of Marks. Iowa Code (2017). 2. Model Act Provisions The Iowa trademark registration statute closely follows the Model State Trademark bill. The significant differences are: Dilution is defined more broadly in the Iowa Code as the lessening of the capacity of a mark to identify and distinguish goods or services regardless of the presence or absence of any of the following: (a) competition between the parties; (b) likelihood of confusion, mistake, or deception. Id (3). Only a single specimen showing the mark as actually used is required with the application for registration of a mark. Id The Iowa Code only requires that a mark be famous as grounds for a dilution claim, as opposed to requiring both that it be famous and distinct. In proving that a mark is famous, the Iowa Code looks to seven non-exclusive factors: 1. The degree of inherent or acquired distinctiveness of the mark in [Iowa]. 2. The duration and extent of use of the mark in connection with the goods and services. 3. The duration and extent of advertising and publicity of the mark in [Iowa]. 4. The geographical extent of the trading area in which the mark is used. *McKee, Voorhees & Sease, P.L.C. specializes in intellectual property rights: patents, trademarks, and copyrights. The firm includes 19 attorneys in Des Moines, Iowa, 16 of which are registered patent attorneys. The authors of this entry are Kirk Hartung and Mark Hansing, with revisions by Gregory Lars Gunnerson. IA-1

2 A.3. STATE TRADEMARK LAW 5. The channels of trade for the goods or services with which the owner s mark is used. 6. The degree of recognition of the owner s mark in its and in the other s trading areas and channels of trade in [Iowa]. 7. The nature and extent of use of the same or similar mark by third parties. Id In addition to the equitable remedy of injunction, the Iowa Code limits monetary awards to either all profits derived from [infringement] or all damages suffered ; whereas, the Model Act permits the recovery of both damages and profit engorgement. (Id ) (emphasis added). The Iowa Code left out the provisions related to severability, time of taking effect, repeal of prior acts, and intent of the chapter. See generally id An assignment of registration of a mark is effective only upon filing duplicate originals of the assignment, along with a $5 filing fee, with the Secretary of State. Any assignment must be recorded at the Secretary of State s office within three months of the date of the assignment. If the assignment is a photocopy, it must be certified by any of the parties to the registration to be a true and correct copy of the original. Id Reasonable attorney s fees may be awarded as a remedy to the prevailing party in exceptional cases. Id Administrator SECRETARY OF STATE First Floor, Lucas Building 321 E. 12th Street Des Moines, Iowa Phone: (515) Fax: (515) sos@sos.iowa.gov Website: 4. Procedure for Applying for Registration a. Forms The application must be filed on a form supplied by the Secretary of State, be completed in the English language and plainly written or typed. If any part is not completed in English, it must be accompanied by a sworn translation. Iowa Admin. Code r (5)(2016). The form is accessible from the Secretary of State website in PDF format at IA-2

3 IOWA A.7. b. Number of Copies Only one application need be filed. Iowa Code c. Fee The fee is prescribed by the Secretary of the State. Id The application fee set by the Secretary is $10. Id (1)(c); see also Business Entity Forms and Fees, Iowa Sec y ofstate, gov/business/formsandfees.html (last visited Jan. 31, 2018). d. Specimens The Iowa Code requires a single specimen showing the mark as actually used. Iowa Code e. Drawing The Iowa Code does not require that a drawing accompany the application; however, it does provide that the Secretary may require that a drawing accompany the application. Iowa Code Intent to Use Provision The Iowa Code does not provide for intent to use registrations. It does, however, permit the reservation of an exclusive corporate or limited partnership name under the title governing business entities. See , Specifically, the Iowa Code permits, the nonrenewable reservation for 120 days. Id , To reserve either a corporate or limited partnership name, an application must be filed with the Secretary of State and the appropriate fee must be paid. Id , The fee to reserve a corporate or limited partnership name is $10. Id (1)(c); see also Business Entity Forms and Fees, Iowa Sec y of State, FormsAndFees.html (last visited Jan. 31, 2018). 6. Classification The classification of goods and services is established by the Secretary of State. Iowa Code and is identical to the Prior U.S. Schedule of Classes of Goods and Services (compare Iowa Admin. Code r (1) (2016) with 37 C.F.R. 6.2 (2012). [A] single application for registration of a mark may include any or all goods upon which, or services with which, the mark is actually being used comprised in a single class, but in no event shall a single application include goods or services upon which the mark is being used which fall within different classes of goods or services. Iowa Admin. Code r (1). 7. Search Prior to Application There is no provision for the Secretary of State conducting any search IA-3

4 A.8. STATE TRADEMARK LAW prior to application. Further, Administrative Rule 40.6(2) states, The secretary of state cannot give legal advice as to the nature and extent of the protection afforded by law nor advise as to the registrability of a specific mark except as questions may arise in connection with pending applications. 8. Search Prior to Registration Similarly, there is no provision in the statute for the Secretary of State s office conducting a search following application and prior to registration. However, the statute does provide that if the same or confusingly similar marks are being processed, the office will grant priority in order of fling, and if the earlier filed registration is granted, the later will be rejected. Iowa Code (7). 9. Doing Business Requirement There is no requirement that a registrant be doing business in the state, only that the mark has been used in the state. Id Types of Marks Registrable Trademarks, service marks, certification marks, and collective marks are registrable. Id Restrictions A mark shall not be registered if it: (1) consists of immoral, deceptive, or scandalous matter; or (2) consists of disparaging, contemptuous, disreputive matter, or falsely suggests a connection with any persons, living or dead, institutions or national symbols; or (3) consists of the flag or other insignia of the United States, or any state, municipality, or foreign nation; or (4) consists of the name, signature or portrait of any living individual without written consent; or (5) is merely descriptive or misdescriptive, or primarily geographically descriptive or misdescriptive; or is primarily a surname; or (6) is likely to cause confusion of purchasers with a mark registered or previously used in this state by another. Id The statute allows a mark to be registered, that would otherwise be unregistrable under (5), if it has become distinctive, as evidenced by proof of continuous use of the mark anywhere by the applicant for five years preceding filing of the registration. Id Use in State Use of the mark in the state is a prerequisite to registration. Id (11), IA-4

5 IOWA A.20.a. 13. Term of Registration The registration is issued for a term of five years. Id Renewal Application for renewal for an additional five years shall be made within six months prior to expiration of the registration, using the form furnished by the Secretary of State. Id ; see also Trade Marks and Service Marks, Iowa Sec y of State, business/formsandfees.html (last visited Jan. 31, 2018). The renewal must include a statement that the mark is still in use in the state, be accompanied by a specimen showing actual use, and include a renewal fee of $10. Id ; see also Trade Marks and Service Marks, Iowa Sec y of State, html (last visited Jan. 31, 2018). 15. Renewal Forms An application for renewal of registered mark is provided by the Iowa Secretary of State s office. Trade Marks and Service Marks, Iowa Sec y of State, (last visited Jan. 31, 2018). 16. Other Forms In addition to the application and renewal forms, the Iowa Secretary of State s office provides forms for assignment and cancellation of a mark. Id. 17. Post-Registration Forms The renewal form is the only mandatory post-registration form. Iowa Code Fees After Registration Post-registration fees are as follows: Renewal of mark, $10; Assignment of mark, $5. Trade Marks and Service Marks, Iowa Sec y of State, (last visited Jan. 31, 2018). 19. Use Requirement for Renewal Continued use of the mark within the state is required for renewal. There is no statutory provision for excusable non-use. Iowa Code Presumptions a. In Favor of Registrant An issued certificate of registration is admissible as competent and IA-5

6 A.20.b. STATE TRADEMARK LAW sufficient proof of the marks registration in any action or judicial proceeding in the state. Id b. Presumption of Doing Business Registration does not create a presumption of doing business for the purposes of qualifying as a foreign corporation or for personal jurisdiction. 21. Remedies Section provides for injunctive relief as well as damages in the form of all profits derived from or all damages suffered by reason of such wrongful manufacture, use, display or sale. The statute also provides for destruction of any counterfeits or imitations in the possession of a defendant, or in the alternative delivery of such counterfeits or imitations to the court. In addition, the statute provides for the award of treble damages and attorney fees to the prevailing party where the court finds the other party acted with knowledge or in bad faith or otherwise according to the circumstances of the case. 22. Persons Entitled to Sue The owner of a mark (including the person issued a registration, the person s legal representative, successor, or assignee (Id ) may sue for infringement. Id B. Dilution 1. Code Section Registration and protection of marks is found in Iowa Code The statute substantially follows Section 12 of the Model State Trademark bill. 2. Judicially Created Dilution Doctrine There is no common law dilution doctrine. 3. Tarnishment Dilution means the lessening of the capacity of a mark to identify and distinguish goods or services, regardless of the presence or absence of the competition between the parties or the likelihood of confusion, mistake or deception. Id (3). Under Section , only famous marks are entitled to injunctive relief for dilution. 4. Likelihood of Confusion See B.3, above. IA-6

7 IOWA C. 5. Competition Between the Parties Pursuant to the statute, dilution of the distinctive quality of a mark may occur notwithstanding the absence of competition or the absence of confusion as to the source of the goods, or services. Id However, in Comidas Exquisitos v. Carlos McGee s Mexican Café, 602 F. Supp. 191, 198, 225 USPQ 426, 431 (S.D. Iowa 1985), aff d, 775 F.2d 260, 227 USPQ 811 (8th Cir. 1986), the Court held that Section cannot enlarge a party s rights under the Lanham Act since the Lanham Act preempts state trademark law. 6. Fame or Distinctiveness Section provides a non-exhaustive list of factors a court may consider in determining whether a mark is famous, including: inherent or acquired distinctiveness within the state; scope of use in connection with the goods or services; scope of advertising and publicity in the state; geographical area of trade; channels of trade; recognition of the mark; use of the same or similar mark by third parties. 7. Remedies Injunctive relief is the only remedy statutorily available, unless the subsequent user was willful. Iowa Code Leading Cases Commercial Sav. Bank v. Hawkeye Fed. Sav. Bank, 592 N.W.2d 321 (Iowa 1999); PSK, LLC v. Hicklin, 757 F. Supp. 2d 836 (N.D. Iowa 2010); see also United States Jaycees v. Commodities Magazine, 661 F. Supp (N.D. Iowa 1986); Comidas Exquisitos, Inc. v. Carlos McGee s Mexican Cafe, Inc., 602 F. Supp. 191 (S.D. Iowa 1985) aff d, 775 F.2d 260 (8th Cir. Iowa 1985); Pioneer Hi-Bred International, Inc. v. Wilson Hybrids, Inc., 585 F. Supp. 1, 217 U.S.P.Q (S.D. Iowa 1982). 9. Extraterritorial Effect None. 10. Preemption Cases The court in Comidas Exquisitos v. Carlos McGee s Mexican Cafe, 602 F. Supp. 191, 198, 225 USPQ 426, 431 (S.D. Iowa 1985), aff d, 775 F.2d 260, 227 USPQ 811 (8th Cir. 1986), stated that the Lanham Act preempted state trademark law; therefore a party s rights under the federal law could not be enlarged by the state dilution statute. C. Unfair Business Practices Acts (Little FTC Acts) There is no general unfair business practice act. Iowa Code Chapter IA-7

8 D. STATE TRADEMARK LAW 714 titled, Theft, Fraud and Related Offenses, prohibits numerous fraudulent business practices, and Section specifically concerns consumer frauds. See generally Iowa Code (2017) Not applicable. For consumer frauds, see F.1-.6, below. D. Uniform Deceptive Trade Practices Act Iowa has not adopted the UDTPA or a variation thereof Not applicable. E. Trademark Counterfeiting 1. Specific Statutes Subsection 26 of Iowa Code Chapter 714, Intellectual Property Counterfeiting prohibits the manufacture or possession of any false or counterfeit label with the intent that it be placed on merchandise to falsely identify its origin or quality, or selling any such false or counterfeit label with the representation that it may be so used. Id Definition The term counterfeiting is not defined; however, the statute does define the term counterfeit mark. Id (1)(a). The definition is: any unauthorized reproduction or copy of intellectual property, or intellectual property affixed to any item knowingly sold, offered for sale, manufactured, or distributed, or identifying services offered or rendered, without authority of the owner of the intellectual property. Id (1)(a). 3. Who Can Sue This is a criminal statute; therefore the county attorney must prosecute. 4. Remedies a. Civil Not applicable. b. Criminal The statute sets out three degrees of intellectual property counterfeiting. Id (2)(a) (c). Intellectual property counterfeiting in the first degree is a class C felony and occurs when: (1) [t]he person is IA-8

9 IOWA F.4. manufacturing or producing an item bearing or identified by a counterfeit mark ; (2) the offense involves more than one thousand counterfeit items or the total retail value is equal to or exceeds $10,000; or the offense is a third or subsequent violation. Iowa Code (2)(a). Intellectual property counterfeiting in the second degree is a class D felony and occurs when: (1) the offense involves between 100 and 999 counterfeit items or the total retail value is between $1000 and $9,999; or the offense is a second violation. Id (2)(b). All other intellectual property counterfeiting is in the third degree, which is an aggravated misdemeanor. Id (2)(c). 5. Protective Provisions for Defendants There are no special protective provisions for defendants. F. False Advertising 1. Statute While there is no general Iowa statute concerning false advertising, Iowa Code Section (2)(a) makes it unlawful to use or employ any deception, fraud, false pretense, false promise, misrepresentation, or to conceal, suppress or omit any material fact with the intent that others rely upon such concealment, suppression, or omission, in connection with the sale or advertisement of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby. 2. Prohibited Practices See F.1, above. 3. Limitations Merchandise is defined to include any objects, wares, goods, commodities, intangibles, securities, bonds, debentures, stocks, real estate, or services. Id (1)(i). 4. Who Can Sue The false advertising section provides both a criminal and civil cause of action. See id (4) (7). The Attorney General s office handles matters falling under Section and has powers provided under this statute. Iowa Code (15). Only the Attorney General can bring civil action. See id. This was challenged in Molo Oil Co. v. River City Ford Truck Sales, Inc., where a plaintiff argued that the statute should provide a private cause of action; 578 N.W.2d 222, (Iowa 1998). The Iowa Supreme Court, however, held that no private cause of action is created by the statute. See id. at 228. IA-9

10 F.5. STATE TRADEMARK LAW 5. Remedies Remedies in civil actions include injunctions, restitution, civil penalties, seizure, and sale of merchandise derived from the false advertising, damages, and costs. See Iowa Code (7), (8), (11). 6. Leading Cases State of Iowa ex rel. Thomas J. Miller, Attorney General v. Internal Energy Management Corp., 324 N.W.2d 707 (Iowa 1982). State of Iowa ex rel. Thomas J. Miller, Attorney General v. Rahamani, 472 N.W.2d 254 (Iowa 1991). Molo Oil Co. v. River City Food Truck Sales, Inc., 578 N.W.2d 222 (Iowa 1998); State v. Ross, 573 N.W.2d 906 (Iowa 1998). G. Corporate Name Reservation Prior to Incorporation 1. Statute Reservation of business names is governed by three sections: Iowa Uniform Limited Partnership Act, Iowa Code ; Iowa Business Corporation Act, Iowa Code ; Revised Iowa Nonprofit Corporation Act, Iowa Code Reservation a. Time Period Business corporations, non-profit corporations, and limited partnerships can reserve a name for a non-renewable 120 day period. Id (2), (1), (1). b. Renewal No name reservation may be renewed. Id. c. Fee There is a $10 fee for reserving a name for any entity. See Trade Marks and Service Marks, Iowa Sec yofstate, (last visited Jan. 31, 2018). d. Prerequisite to Incorporation A name does not have to be reserved in advance of incorporation. See Iowa Code , Transfer. The right to the exclusive use of a reserved name can be transferred to another person by filing, with the Secretary of State, a Notice of Transfer, executed by the applicant for whom the name was reserved, and specifying the name and address of the transferee. Id (3), (2), (2). For limited partnerships, the transfer is considered effective when the secretary of state files the IA-10

11 IOWA G.6. notice of transfer. Id (3). For all business entities, a notice of transfer has a $10 fee. See Trade Marks and Service Marks, IASec y of State, (last visited Jan. 31, 2018). 3. Conflicting Names The rules governing conflicting names for limited partnerships and corporations, both for-profit and non-profit are the same. A conflicting name will be authorized if any of the following apply: (1) the present user of the conflicting name consents in a signed record and files with the Secretary of State an undertaking... to change the conflicting name to one that is distinguishable; (2) the applicant provides the Secretary of State a certified copy of a final judgment from a court establishing applicant s right to use the name in Iowa; or (3) the applicant provides the Secretary of State proof that the present owner of the name has merged with the applicant, has been converted into the applicant, or transferred substantially all of its assets, including the conflicting name, to the applicant. Iowa Code (5), (3) (4), (3) (4). 4. Restrictions on Use of Corp. and Similar Terms A corporate name must not include language that implies or directly states that the corporation is organized for any purpose other than those permitted by the statute and its articles of incorporation. Id (1)(b), (1). The phrase limited liability limited partnership or the abbreviation LLLP or L.L.L.P. must not be used for a limited partnership. Id (2). Likewise, the phrase limited partnership or the abbreviation LP or L.P. must not be used for a limited liability limited partnership. Id (3). 5. Required or Authorized Use of Corp. or Similar Term A business corporation name [m]ust contain the word corporation, incorporated, company, or limited, or the abbreviation corp., inc., or ltd., or words or abbreviations of like import in another language. Id (1)(a). A limited partnership name must contain the phrase limited partnership or the abbreviation LP or L.P. Id (2). Similarly, a limited liability limited partnership must contain the phrase limited liability limited partnership or the abbreviation LLLP or L.L.L.P. Id (3). 6. Search Provision There is not provision in the statute related to name searches. The IA-11

12 G.7. STATE TRADEMARK LAW public may, however, search the Secretary of State business entity database online for free at the Secretary of State website, iowa.gov. 7. Policy Regarding Identical Words Generally, a name cannot be the same as, or deceptively similar to, the name of any domestic corporation or limited partnership existing under the laws of the state, or the name of any foreign corporation or limited partnership authorized to transact business in the state, or any reserved or assumed name Iowa Code (4), (2), (2). There are no published guidelines regarding similar names, and the Secretary of State has discretion to accept or reject name applications. 8. Substantive Rights No substantive trademark or service mark rights arise under the state law from incorporating under a specific name. 9. Prohibited Terms There are no general prohibitions against use of specific words or phrases in a corporate name, with the exception of those set forth in G.4, above. However, the Iowa trademark statute, Iowa Code section , prohibits registration of marks which disparage, bring into contempt or disrepute, or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols; or comprises the flag, coat-of-arms or other insignia of the United States, any state or municipality, or any foreign nation; or comprises the name or portrait of any living individual, without the individual s written consent; or is primarily a surname. 10. Administrative Agency SECRETARY OF STATE First Floor, Lucas Building 321 E. 12th Street Des Moines, Iowa Phone: (515) Fax: (515) sos@sos.iowa.gov Website: Forms The Secretary of State s Office has forms, including name reservation and transfer of name reservation. Forms are also available in PDF format at IA-12

13 IOWA H Fees There are no fees relating to corporate names, except for name reservation and transfer of a name reservation, both of which are $10. All current fees set forth by the Secretary of State are listed on the Secretary of State s website at AndFees.html. H. Trade Name Registration (Fictitious Name Statutes) 1. Purpose Business Corporations, Iowa Code (4); Iowa Code Non- Profit Corporation Act, Iowa Code ; Conducting Business Under Trade Name, Iowa Code 547, applicable to individuals and partnerships. The purpose of these statutes is not stated, nor is there any case law dealing with their purpose. 2. Entities Required to File Filing an assumed name is not mandatory for business corporations (Id ) or for nonprofit corporations. Failure of a person or copartnership to file under Section 547 is a simple misdemeanor. 3. Limited Partnerships Limited partnerships are required to register assumed names. Id Where to File Business and nonprofit corporations file an assumed name application, on a form available from the Secretary of State, with: SECRETARY OF STATE First Floor, Lucas Building 321 E. 12th Street Des Moines, Iowa (515) Fax: (515) sos@sos.iowa.gov Website: Persons and copartnerships conducting a business under an assumed name must file, with the county recorder of the county in which the business is to be conducted, a verified statement showing the name and address of each person having an interest in the business and stating the address where the business is to be conducted. Id IA-13

14 H.5. STATE TRADEMARK LAW 5. Fees The assumed name filing fee for a non-profit or business corporation is $10 payable to the Secretary of State; for a person or copartnership, $5 payable to the county recorder. 6. Publication There are no publication provisions. 7. Foreign Corporations A corporation may apply to the Secretary of State for authorization to use a name which is indistinguishable from a name used by domestic corporation or limited partnership existing under the laws of the state, or the name of any foreign corporation or limited partnership authorized to transact business in the state, or any reserved or assumed name. Id , , Secretary of State shall authorize use of the name applied for if one of the following conditions applies: (1) The other corporation consents to the use in writing and submits a form to the Secretary of State to change its name to a name that is distinguishable from the corporation wishing to use its previous name; or (2) The applicant delivers to the Secretary of State a certified copy of the final judgment of a court of competent jurisidiction establishing the applicant s right to use the name applied for in Iowa. A corporation may use the name including the fictitious name on another domestic or foreign corporation in Iowa if the other corporation is incorporated or authorized to transact business in the state and the proposed user corporation: (1) has merged with the other corporation; (2) has been formed by reorganization of the other corporation; or (3) has acquired all or substantially all of the assets, including the corporate name, of the other corporation. Id , 504A.6, Civil Penalties There are no civil penalties for failure to file an assumed name. 9. Criminal Penalties It is a simple misdemeanor for a person or copartnership to fail to file the verified statement with the county recorder, punishable by imprisonment not exceeding thirty days or a fine not exceeding $500 Id Each day that the person or copartnership conducts business under an assumed name without filing the verified statement is a separate and distinct offense Id IA-14

15 IOWA I Certificate A certificate authorizing use of an assumed name is issued by the Secretary of State to business and nonprofit corporations if the assumed name is not similar or deceptively similar to other corporate names registered with the Secretary of State. 11. Renewal or Deletion For business corporations and nonprofit corporations, at the time of annual license fees, there is an additional fee of $20 and $5, respectively, for continuing use of the assumed name. 12. Substantive Rights No substantive rights are conferred by filing an assumed name. 13. Search The Secretary of State s Office searches corporate names, limited partnership names and assumed names, but not registered trademarks, for similar or deceptively similar names, before issuing a certificate authorizing use of an assumed name. 14. Agent The statute does not require designation of a registered agent for service of process. 15. Mail Registration Registration may be accomplished by mail. I. State Statutory and/or Common Law Unfair Competition or Passing Off Provisions Iowa does not have a general state statute prohibiting unfair competition, imitation of (unregistered) names and marks, or passing off apart from the Iowa trademark and anti-dilution statutes. See A and B, above Not applicable. 6. Common Law Action for Unfair Competition State courts recognize a state common law action for unfair competition, imitation of (unregistered) trade names and trademarks, and palming off. 7. Elements of a Common Law Cause of Action Under Iowa common law, the elements of unfair competition are whether facts showing confusion have been or are likely to be IA-15

16 I.7. STATE TRADEMARK LAW produced, whether there have been actual sales of one product for the other, whether there have been actual mistakes of one product for the other, and whether are similarities of the two brands as that one may readily be mistaken for the other. Sartor v. Schaden, 125 Iowa 696, 701, 101 N.W. 511, 513 (1904); Motor Accessories Mfg. Co. v. Marshalltown Motor Material Mfg. Co., 167 Iowa 202, (1914) ( What is unfair competition is a mixed question of law and fact, and has been variously defined and applied by the courts. It consists in the conduct of a trade or business in such a manner that there is an expressed or implied representation that the goods or business of the one man are the goods and business of another, and applies in cases where one simulates the particular device or symbol employed by another in such a way as to deceive the ordinarily prudent person, thereby leading him to believe, by the marks thus simulated, that the goods are the goods of another, and thus practicing a fraud upon the person whose goods he simulates, and upon the general public dealing in those goods. ). Sartor v. Schaden, 125 Iowa 696, 701, 101 N.W. 511, 513 (1904). Elements of palming off in Iowa: What is unfair competition is a mixed question of law and fact, and has been variously defined and applied by the courts. It consists in the conduct of a trade or business in such a manner that there is an expressed or implied representation that the goods or business of the one man are the goods and business of another, and applies in cases where one simulates the particular device or symbol employed by another in such a way as to deceive the ordinarily prudent person, thereby leading him to believe, by the marks thus simulated, that the goods are the goods of another, and thus practicing a fraud upon the person whose goods he simulates, and upon the general public dealing in those goods. The ground of the action of unfair competition is fraud, and this may be shown by direct testimony, or by facts and circumstances, or inferred from the manner in which the business is carried on. Lennox Furnace Company v. Wrots Iron Heater Company, 181 Iowa 1331, 1344, 160 N.W. 356, 360 (1917). Iowa also recognizes a common law cause of action for reverse palming off, the elements of which are: (1) that the work, product, or design at issue originated with the plaintiff; (2) that the origin of the work, product, or design was falsely designated by the defendant; (3) that the false designation of origin was likely to cause consumer confusion; and (4) that the plaintiff was harmed by the defendant s false designation of origin. Walker Mfg. v. Hoffmann, Inc., 261 F. Supp. 2d 1054, 1069 (N.D. Iowa 2003). IA-16

17 IOWA J Remedies Remedies available for common law unfair competition include actual damages, injunctive relief, and exemplary damages if actual damages (more than just nominal damages) are proven. 9. Leading Cases A number of cases have followed the general rules recited in the cases in I.7, above. Commercial Savings Bank v. Hawkeye Federal Savings Bank, 592 N.W.2d 321 (Iowa 1999); Cemen Tech., Inc. v. Three D Indus., L.L.C., 753 N.W.2d 1, 12 (Iowa 2008). J. Statutes of Special Application and Personal Name Statutes 1. Special Statutory Sections (a) Corporate names of Business Corporations, see Iowa Code , (2017). (b) Corporate Names of Nonprofit Corporations, see id (c) Names of Partnerships (Uniform Limited Partnership Act), see id (d) Registration of Farms, see id (e) Insurance Company Names, see id (f) Name of Co-operative Association Must Include Word Cooperative, see id (1). (g) Use of Term Co-operative Restricted, see id (h) Restriction on Terms Bank and Trust, see id (2). (i) State Bank Names, see id (j) Labeling of Foods, Drugs, etc., see id (k) Labeling of Commercial Feed, see id (l) Labeling of Meat and Poultry, see id. 189A.16. (m) Labeling of Organic Agricultural Products, see id. 190C.26. (n) Marking and Branding of Livestock, see id. 169A. (o) Sale of Various Food Products by Name, Trade Name, or Trademark Name, see id (p) Unfair competition or unfair and deceptive acts or practice prohibited, see id. 507B.3:4 (Insurance Regulation). The special application statutes listed at (a)-(i), above, are merely registration procedures. The statutes listed in (j)-(m), above, prohibit deceptive or inaccurate labeling of various products. No civil remedies are specified for prohibited activities listed under (e), (f), (g), and (h), above. However, confiscation or condemnation of violative goods is possible under (e), above, and criminal misdemeanor penalties exist under (e), (f), and (g), above. IA-17

18 J.2. STATE TRADEMARK LAW No on-point case law can be found for these special application statutes. 2. Use of Personal Name Section precludes registration of a mark that consists primarily of merely a surname. However, Iowa has no separate statutes prohibiting use of a name of living or deceased individuals. K. Right of Publicity Iowa Courts have not recognized the common law right of publicity. However, they have recognized the tort of invasion of privacy, based upon the Restatement (Second) Torts 652A. One of the forms of invasion of privacy listed at 652A(2)(b) includes appropriation of the other s name or likeness, which appears to be a form of the right of publicity. There is no state statute of any relevance to the right of publicity Not applicable. L. Criminal Statutes 1. Statutory Provision While there are no specific state criminal statutes directed to unauthorized use of trade names or trademarks, fraudulent labeling or label counterfeiting is proscribed in Iowa Code Sections 714.8(2) and (8). Additionally, consumer fraud in advertising is proscribed at Iowa Code Section Registration of trade names is required at Iowa Code Sections , and neglect of registration does carry possible criminal penalties. Iowa Code Section 714.8(2) prohibits misrepresentation of the quality, quantity, maker or source of goods by labeling whereas subsection (8) prohibits counterfeiting of labels. The consumer fraud statutes prohibit any deception, fraud, false pretense, false promise, misrepresentation, or the concealment, suppression or admission of any material fact with intent to let others rely upon such.... Iowa Code Sections provides that before any entity can conduct business under a trade name or assumed name other than the true surnames of the persons owning the entity, the entity must file a registration of the name in the county where the business will be conducted. The maximum penalties are: fraudulent practices (Class C felony), imprisonment for no more than ten years and fines of no IA-18

19 IOWA M.2. more than $10,000; consumer fraud, a civil action which can be referred to the County Attorney and treated as a theft; violation of trade name registration provisions (a simple misdemeanor), imprisonment not to exceed thirty days, fine not to exceed $500. Iowa Code (2017). The consumer fraud statutes refer to violation of miscellaneous civil statutory sections, and the trade name registration provisions are civil statutory sections. M. Trade Disparagement or Trade Libel 1. Statute or Common Law Doctrine There are no statutory provisions for trade libel or trade or product disparagement. However, the Iowa Supreme Court has used this doctrine as slander of property. Hanson v. Hall Mfg., Co., 190 N.W. 967, 968 (Iowa 1922). Additionally, the Iowa courts have accepted the doctrine of trade libel. See Vojak v. Jensen, 161 N.W.2d 100 (Iowa 1968). The common law doctrine of trade libel has also been adopted. It would also appear that common law libel per quod and common law slander doctrines have been implicitly adopted by the Iowa courts. See id. No case law has been developed under these doctrines, however, with regard to trademark or trades issues. The Iowa Supreme Court has developed the doctrine of slander of title to a further degree. See Brown v. Nevins, 499 N.W.2d 736, 738 (Iowa 1993); Davitt v. Smart, 449 N.W.2d 378, 379 (Iowa 1989); Hagan v. Liberty Moon Corp. of Ames, Iowa, 423 N.W.2d 886, 888 (Iowa Ct. App. 1988); Henderson v. Millis, 374 N.W.2d 497, 506 (Iowa 1985); Belcher v. Little, 315 N.W.2d 734, 736 (Iowa 1982); Witmer v. Valley Nat l Bank of Des Moines, 273 N.W. 370, 371 (Iowa 1937). These cases may apply to some degree to the doctrine of trade disparagement or trade libel. It is noted that statutory criminal libel (Iowa Code 737.1) was, on occasion, applied to civil actions for damages. Vojak, 161 N.W.2d at 104, however this section was repealed in Elements of Cause of Action The elements of slander of property or title are: (1) The uttering and publication of the slanderous words; (2) that they were false; (3) that they were malicious; (4) that he sustained special damages thereby; (5) that it has an estate or interest in the property slandered. Hanson, 190 N.W. at 968. To state a cause of action for libel, the elements of malice, falsity and damages must all be proved by the plaintiff. Vojak, 161 N.W.2d at 104. IA-19

20 M.3. STATE TRADEMARK LAW 3. Presumptions If a statement is libelous per se, however, the elements of malice, falsity, and damages are presumed. Vojak, 161 N.W.2d at 104. Statements that are libelous per se include that that charge business incompetence or lack of skill in the trade, occupation, profession, or office by which one earns [a] living. Id. at Remedies General tort damages principles apply. 5. Punitive Damages Punitive damages are available. To recover punitive damages, one must show more than actual or legal malice or want good faith and probable cause. One must show wrongful conduct accompanied by willful or reckless disregard of the rights of others. Brown v. Nevins, 499 N.W.2d at Single Publication No law has been rendered as to whether a single publication rule is adopted or whether each repetition constitutes an additional offense. 7. Defenses Truth is a complete defense to a charge of libel. Vojak, 161 N.W.2d at 108. Further, substantial truth of a statement is recognized as an absolute defense. Behr v. Meredith Corp., 414 N.W.2d 339, 342 (Iowa 1987). For substantial truth to serve as a defense to libel, the defendant does not need to establish the literal truth of every detail of the statement, so long as the gist of the statement is substantially true. Id. The court is to determine the gist by looking at the highlight of the [statement], the pertinent angle of it, and not to the items of secondary importance which are inoffensive details, immaterial to the truth of the defamatory statement. Id. at 342 (quoting Vachet v. Central Newspapers, Inc., 816 F.2d 313, 316 (7th Cir. 1987)). However, a defense of truth or substantial truth is inapplicable to the determination whether a statement is libelous per se. Kelly v. Iowa State Educ. Ass n, 372 N.W.2d 288, 295 (Iowa Ct. App. 1985). Either absolute or a qualified privilege is available. See Robert s River Rides v. Steamboat Dev. Corp., 520 N.W.2d 294, 304 (Iowa 1994). Qualified privilege is an affirmative defense that must be pleaded and proved. Vinson v. Linn-Mar Cmty. School Dist., 360 N.W.2d 108 (Iowa 1984). The qualified privilege exists if the communication is made in good faith on subject matter in which the communicator has an interest, or in reference to which he has a duty, if it is made to a person having a corresponding interest or duty even though the duty IA-20

21 IOWA N.5. is not a legal one. Taggart v. Drake Univ., 549 N.W.2d 796, 803 (Iowa 1996) (citing Brown v. First Nat l Bank of Mason City, 193 N.W.2d 547, 552 (Iowa 1972)); see also Barreca v. Nickolas, 683 N.W.2d 111, (Iowa 2004). The essential elements of a qualified privilege are good faith, an interest to be upheld, a statement limited in its scope to this purpose, a proper occasion, and publication in a proper manner and to proper parties only. Barreca, 683 N.W.2d at 118 (quoting Winckel v. Von Maur, Inc., 652 N.W.2d 453, 458 (Iowa 2002)). The qualified privilege evaporates if actual malice is proved. Id. N. Franchising or Business Opportunity Statutes 1. Statute Iowa Code Chapter 551A contains the current statute concerning business opportunity promotions. Iowa Code 551A.1.10 (formerly 523B). 2. Registration A seller is required to file an irrevocable consent to service of process with the secretary of state prior to engaging in the sale of a business opportunity in Iowa. Id. 551A.7. Although such a seller is required to deliver a written disclosure to a purchaser, there is no requirement for such a disclosure to the State. Id. 551A.3 (1) (2). 3. Forms No form is specified for the irrevocable consent to be filed by a seller with the secretary of state, but the contents of the consent are defined. Id. 551A.7. Similarly, no form is specified for the written disclosure that must be delivered to a buyer. The statute does provide, however, that the disclosure document must have a cover sheet with certain specified language. Id. 551A.3(2). Further, the disclosure document must be in one of three forms: a uniform franchise offering; a document prepared pursuant to 16 C.F.R. 436; or a form including specified information. Id. 551A.3(3). 4. Fees Whereas former section 523B specified fees for filing and renewal of a disclosure statement, current chapter 551A does not specify a fee amount. Compare Iowa Code 523B.2(7) (2003) with Iowa Code 551A.1 10 (2017). 5. Approval Procedure Whereas former section 523B.5 provided that the Insurance Commis- IA-21

22 N.6. STATE TRADEMARK LAW sioner, acting as Administrator, reviewed disclosure statements for compliance with the statute, no such approval is required under the current version of the statute. Further, the disclosure statement requirements under current Section 551A.3 provide that the disclosure must state: This business opportunity does not have the approval, recommendation, or endorsement of the state of Iowa. The information contained in this disclosure document has not been verified by this state. Id. 551A.3(2). 6. Bond There is no provision in Section 551A for requiring a surety bond, letter of credit, or establishment of a trust account by the seller before it may do business. 7. Waiting Period In addition to dispensing with any fees and the approval procedure of former Section 523B, current Section 541A does not include any waiting period requirement before any advertising, offers for sale or lease, or sales or leases are effectuated. 8. Penalties Iowa Code Section 551A.10 provides that a seller who engages in willfully conduct violating the disclosure requirements set out in Section 551A.3; providing misleading advertising as provided in Section 551A.9; willfully violating other rules under Chapter 551A; or willfully violating an order of which the person has notice upon conviction, is guilty of a class D felony. Id. 551A.10(1). For other non-willful violations of Chapter 551A can be charged with an aggravated misdemeanor. Id. Section 551A.10 further provides that business opportunity contracts and willful violations not set out in Section 551A.10(1) are subject to the criminal fraud provisions of Chapter 714. Id. 551A.10(2) (3). 9. Required Disclosures Section 551A.3 sets out the requirements for disclosure documents. A disclosure document must have a cover sheet consisting of a title and statement specified by the statute. Id. 551A.3(2). The disclosure itself can be in one of three forms. First, the document may be in the form of a uniform franchise offering circular prepared in accordance with the guidelines adopted by the North American Securities Administrators Association. Id. 51A.3(3)(a). Second, the disclosure may be prepared pursuant to the FTC rule relating to 16 C.F.R. 436 or any successor regulation. Id. 551A.3(3)(b). Finally, the disclosure document may be IA-22

23 IOWA N.13. in any other form that includes all 23 items set out in the statute. Id. 551A.3(3)(c). 10. Standing to Sue Section 551A.8 (1) liability to purchaser in action for recision of contract or damages (4) any person injured by a violation of the chapter may bring civil action and recover damages or other relief. 11. Remedies The principle remedies for a purchaser are set out in Section 551A.8. These remedies specifically include recision of contract, as well as recovery of consideration paid for the business opportunity, and actual damages, attorney fees, and court costs as against any person who violates the disclosure document or contract requirements of Section 551A.3. Id. 551A.8(1). Further, Section 551A.8(2) provides for joint and several liability for every person who directly or indirectly controls a party liable under this section, every partner in a partnership so liable, every principal executive officer or director of a corporation so liable, every person occupying a similar status in, or performing similar functions for, and every employee of, a party so liable who materially aids in the act or transaction constituting the violation. In addition, Section 551A.8(4) provides that any person injured by a violation of Chapter 551A may bring a civil action and recover damages or obtain other injunctive or equitable relief, and a prevailing party shall be awarded costs and fees incurred as a result. Finally, Section 551A.6 provides that a purchaser may cancel a business opportunity contract for any reason within three business days of the later of the contract being signed by the purchaser or being accepted by the seller. 12. Contract Requirements Section 551A.3(4) sets out the requirements for a business opportunity contract. The first requirement is that such contract must be written, and a copy must be provided to the purchaser when executed. Id. 551A.3(4)(a). Further, the contract must contain all eight of the provisions specified. Id. 551A.3(4)(b). 13. Exceptions The exemptions from the disclosure document and contract requirements of Section 551A.3 are set out in Section 551A.4. In particular, Section 551A.4(1) exempts a variety of transactions based on the type of entity that is the purchaser, whether the seller delivers certain IA-23

24 N.14. STATE TRADEMARK LAW disclosure documents to the purchaser within a specified time, or the payment meets certain requirements. Id. 551A.4(1)(a)-(c). Section 551A.4 also provides that in any administrative, civil, or criminal proceeding, the burden of proving any exemption, exception, or exclusion is on the party claiming it. Id. 551A.4(2). 14. Registered Marks Exception Iowa Code Section 551A.1 provides that [a]n offer or sale of a business opportunity which involves a marketing plan made in conjunction with the licensing of a federally registered trademark or federally registered service mark is not included within the statutory definition of a business opportunity, and is therefore not subject to this chapter, so long as the seller has a minimum net worth of one million dollars. Id. 551A.1(2)(b)(3). 15. Federal Registration See N.14, above. 16. Use of UFOC The statutes do not specifically allow alternative use of a Uniform Franchise Offering Circular (UFOC). 17. Other Forms As noted above (N.9), Section 551A.3 allows for the use of either a uniform franchise offering circular prepared in accordance with the NSAA guidelines or FTC rules under 16 C.F.R Amendment Because approval of disclosure statements is no longer required under the current business opportunity statute, there is similarly no provision for amendment of disclosure statements. 19. Other Franchise Regulations Section 551A.9 concerns the prohibition of fraudulent practices including misleading statements made in disclosure documents, advertising, or other misrepresentations, omissions, or misleading conduct relating to the business opportunity transaction. 20. Liability of Franchisor for Torts of Franchisee No case law has been found on the issue of liability of the franchisor or trademark licensor for the torts of the franchisee or licensee. IA-24