I. Restatement of the Law (third), Unfair Competition
§ 1 GENERAL PRINCIPLES
One who causes harm to the commercial relations of another by engaging in a business or trade is not subject to liability to the other for such harm unless:
(a) the harm results from acts or practices of the actor actionable by the other under the rules of this Restatement relating to:
(1) deceptive marketing, as specified in Chapter Two;
(2) infringement of trademarks and other indicia of identification, as specified in Chapter Three;
(3) appropriation of intangible trade values including trade secrets and the right of publicity, as specified in Chapter Four; or from other acts or practices of the actor determined to be actionable as an unfair method of competition, taking into account the nature of the conduct and its likely effect on both the person seeking relief and the public; or
(b) the acts or practices of the actor are actionable by the other under federal or state statutes, international agreements, or general principles of common law apart from those considered in this Restatement.
II. Default is you have the right to copy or compete unless there is an IP right protecting (No Federal CL Protection) Cheney v. Doris Silk Corp
III. Supremacy Clause preempts states laws
a. Bonito Common law tort of unfair competition has been limited to protection against nonfunctional aspects that acquire secondary meaning. State regulation of IP must yield to the extent that it clashes with the balance struck by Congress in our patent laws.
b. Searscreated an exception for labeling “…allowing states, in appropriate circumstances, required patented or unpatented goods to be labeled to prevent others from being misled as to the source….” This allows unfair competition law.
1. Compco Factors in considering whether copying of an unpatented article would need to be subject to state labeling requirement:
i. Whether Article could be made in some other way.
ii. “Nonfunctional”and not essential use of the article
iii. Secondary Meaning
iv. Potential Confusion among purchasers.
c. INS v. AP- presents a very narrow exception for hot news to this general rule. Creates a CL property right against misappropriation of commercial value.
1. NBA v. Motorola(HOT NEWS TEST)
i. Plaintiff generates and gathers the information at a cost
ii. The information is time sensitive
iii. Defendant’s use constitutes free-riding on the P’s efforts
iv. Defendant is in direct competition with the P product or service; and
v. Freeriding reduces the incentive to produce product or service
2. Associated Press v. All Headline News Corp.- Erie would render the federal common law origins of INS non-binding in the federal courts, the cause of action is still recognized under the laws of various states, including the state of NY
Trademarks Development
I. No Federal Protection (Trade-Mark Cases)
a. Until Lanham Act of 1946-trademark was state CL, where your rights expanded along with use
b. First TM Act was ruled unconstitutional under Art. I, § 8, Cl. 8 & court further dais there is no power under Commerce Clause
II. CL Right with USE (Hanover Star Milling Co v. Metcalf)
a. Trademark infringement is part of unfair competition
b. Trademark right is with use in commerce .
i. Protect mark as a function of good will, but not an outright property except with the connection of existing business.
III. Default is State CL if Mark is not Registered (Stork Restaurant, Inc v. Sahati)
a. CL protect good will from dilution via confusion of source
i. Whether they are competing business doesn’t matter
ii. Business size disparity doesn’t matter
iii. Geographic distances doesn’t matter
iv. Deception as to the inexperienced and the gullible
1. Not a strong claim if TM is not visible (Custom Manufacturing v. Midway Services, Inc-circuit boards in water meters)
v. Actual loss of trade need not be shown-only the likelihood of confusion
IV. TM owner does not have an absolute right to its name/mark (Champion Spark Pug Co. v. Sanders)
a. Fair use
i. Not likely to cause confusion; and
ii. Primarily to describe the good
b. Full disclosure gives the manufacturer all the protection to which he is entitled and gets the benefit of original good will
What is a Trademark?
Subject Matter of Trademark Protection
Definition
Restatement (third) of Unfair Competition
§ 9 DEFINITIONS OF TRADEMARK AND SERVICE MARK
A trademark is a word, name, symbol, device, or other designation, or a combination of such designations, that is distinctive of a person’s goods or services and that is used in a manner that identifies those goods or services of others. A service mark is a trademark that is used in connection with services.
Lanham Act § 45 [15 U.S.C. § 1127]
The term ‘trademark’ includesany word, name, symbol, or device, or any combination thereof—
(1) used by a person, or
(2) which a person has a bona fide intention to use in commerce … to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.
*Cannot TM a term where the public views the term as primarily describing the product and not rather than of producer (source of goods). Kellogg Co. v. National Biscuit Co.
Types of marks
Word Marks
a. Coca-Cola Co v. Koke Co. of America
i. Coca Cola’s developed a “secondary meaning”. Once a descriptive mark develops secondary meaning it has as much right to protection as anything else.
ii. Defendant selected “Koke” to reap the benefit of Coke’s advertising, and defendant’s deceptiveness defense is not viable b/c of secondary meaning.
b. Slogans may function as trademarks
i. § 2 if distinctive it shall not be refused registration merely on account of its nature
ii. A descriptive slogan, it can be a trademark if it develops a secondary meaning through extensive, continuous, and substantial use (can occur by placing slogan on product packaging)
iii. Length, if it is incapable of “read casually” than not protectable under TM
c. Surnames (Peaceable Planet v. Ty, Inc)
i. It’s a name (“Niles”, but it’s an arbitrary name when affixed to a stuffed camel, so it is suggestive and therefore need not acquire secondary meaning. Peaceable Planet holds it as a trademark.
ii. Generally, cannot get TM on surname (§ 2(e)(3)), unless build secondary meaning.
1. Cannot use prior PTO ruling to estop later refusal to register.
2. Do allow combination of two surnames.
3. If seeking name other than his own must certify
a. If living the person gave permission for use of his name; and
b. Surname has acquired secondary meaning
Service Marks
a. Lanham Act § 3 [15 U.S.C. § 1053]
i. Service marks are treated similarly to trademarks
b. Lanham Act § 45 [15 U.S.C. § 1127]
i. “service mark” means any name, symbol, or device or combo…to identify (1) services provided (2) by the individual
ii. “service” broadly interpreted ” the performance of labor for the benefit of another”
iii. Unlike trademark a service is “used” when it is displayed in the advertising of services, as well as in their sale or offering.
iv. Qualifying useof a service mark for purposes of registration must be in connection with the offering, ra
number or a combination of letters and numbers so long as they are not merely descriptive.
i. Ex. 7-ELEVEN, while descriptive (of hours of operation), was protectable because of secondary meaning.
b. SoundsA “unique, different, or distinctive” sound or combination thereof may be protectable as a trademark.
i. “unique, different” sounds were protectable absent secondary meaning
ii. “commonplace” sounds, if used in uncommon context may be protectable with secondary meaning. (NBC)
c. Fragrance/ Smells A smell impregnated into a product is protectable with secondary meaning if it serves as a source identifier and is not merely inherent in the nature of the product (e.g. perfume, potpourri). (floral fragrance for sewing thread was registrable)
d. Location on Goods of TM The location of the mark may itself be protectable if it has acquired secondary meaning. (Levi’s® Red Tab on right rear pocket of pants and jeans)
e. Flavor has not faired well as usually found to be functional
f. Texture (velvet covering over a wine bottle)
Distinctiveness
Arbitrary, Fanciful, Suggestive and Descriptive Terms
Lanham Act § 2(e) [15 U.S.C. § 1052(e)
No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it—
e) Consists of a mark which (1) when used on or in connection with the goods of the applicant is merely descriptive or deceptively misdescriptive of them, (2) when used on or in connection with the goods of the applicant is primarily geographically descriptive of them, except as indications of regional origin may be registrable under section 1054 of this title, (3) when used on or in connection with the goods of the applicant is primarily geographically deceptively misdescriptive of them, . . . .
a. The Distinctiveness Spectrum-not bright-line, shifts depending on time, product, user, usage
i. Coined or Fanciful & Arbitrary
ii. Suggestive Terms – requires imagination, thought or perceptions to arrive at a conclusion about the nature of the goods. (E.g., “Ivory”). Suggestive terms are protectable w/o any proof of secondary meaning. Whether a term is merely descriptive or suggestive is often dispositive in litigation.
1. hyphenated word, so that it is one word, or conjoining two descriptive words resulting in a misspelled word, courts may view it as more suggestive. (“BROWN-IN-BAG”; EVERREADY suggestive)
iii. Merely Descriptive Terms-describe a characteristic, attribute, or ingredient of the goods. These terms can become trademarks if they acquire secondary meaning (exclusive and continuous use for 5 years is prima facie evidence of a mark’s secondary meaning)
1. It is possible to protect one version of a generic or merely descriptive term—even if no secondary meaning, by:
a. Incorporating distinctive style elements or typefaces in the term; or
b. Use the term in conjunction with a corporate name (e.g., Miller Lite).
c. You must disclaim any rights in the term itself—only the particular iteration is protected.
iv. Generic or Common Descriptive Terms that refers to the genus of which the particular product is a species. Such terms can never become trademarks under any circumstances. Note also, that initials or abbreviations of generic terms that “continue to convey to consumers the original generic connotation of the unabbreviated name” are also generic. (AOL; AT&T)
