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Trademarks and Unfair Competition
South Texas College of Law Houston
Page, Phillip E.

Trademarks and Unfair Competition
Lunney, Cases and Materials on Trademark Law, 2010
Professor Page – Spring 2014
Grade A-
Trademark Basis
·         Consumer has not STANDING to do anything about being tricked by TM fraud.
·         Trademarks develop GOODWILL
o   Affection and identity customers have for a product
·         Trademarks assure consumers are getting a particular QUALITY
o   Not specifically a good quality, a CONSISTENT QUALITY
·         Trademark Law in U.S. built around a desire for competition
·         Trademarks similar to advertisements
o   Informative, allows you to find out where something comes from
·         Heart of Trademark is protecting consumer
·         Common law TM
o   Tort
·         Federal TM
o   Lanham Act 43a
Use Requirement
·         The exclusive right to a trademark belongs to one who first uses it in connection with specified goods
·         Needs to be used IN COMMERCE
o   Internal use in insufficient
o   Ex: Secret, undisclosed internal shipments are generally inadequate to support the denomination “use.”
·         Merely trying to reserve a mark is bad faith
·         Intent establishes not right to a trademark; one USE does
·         Use is a signal to competitors to back off and not adopt this mark
·         Dilemma: need to spend money to get into market only to find out someone beat you to it two days earlier
·         Two kinds of USE
o   Few sales in stream of commerce
o   Priority of Use
·         Two ways potential competitors can be informed
o   In the market place
o   Registration system
·         Experimental marketing can be USE
o   Timeout pants not ready not, but you will love them
·         Cases: Blue Bell v. Farah; Zazu v. L’Oreal.
Intent to Use Alternative
·         The Use requirement is designed to put competitors on notice
·         Analogous Use – term of art in trademark law (regrettable) – even though he hasn’t really made use of the product yet because it isn’t available to customers, he has made a kind of use in secondary meaning that it is analogous to use.  Courts have been a little less tolerant of Analogous Use.  Can just use ITU now.
o   stretching the use to “connecting with the public.” Analogous to, offering it to the public. 
·         Secondary Meaning – the mark, when used in context, refers, not to what the descriptive word ordinarily describers, but to the particular business that the mark is meant to identify. 
·         Advertising and promotion is sufficient to obtain rights in a mark as long as they occur “within a commercially reasonable time prior to the actual rendition of service…”
·         Illegality doesn’t make any difference.
·         Token Use Doctrine – make a token shipment, obtain fed reg before marketing campaign and thereby warn others.  Still expensive and required courts to be disingenuous.   Also, if you don’t register and use, it does not put competitors on notice. 
·         Intent to Use (ITU)
o   bona a fide (in the position to manufacturer and market in the 6 months, which is extendable – business plan needed!) intentions to use the trademark in commerce
o   published in gazette and given notice to competitors
o   30 days for people to file opposition
o   then gets notice of allowance
o   has 6 months to satisfy the

ill be abandoned
o   rebuttable
·         Bad Faith – very broad view (not sure why it is this broad).  If in the US and you know that someone else was operating under a name you can’t go to another state and open under the same name.   
o   Could be international bad faith if foreign mark was famous or if you were trying to block them from entering the US markets (CTs split)
·         US Courts say foreign use does not matter.  Needs to be in the US or has no rights
o   Exceeds PTO’s jurisdiction
·         Gray Goods – Genuine goods, but imported from someplace manufacturer doesn’t want.
o   EX: Camera sold in Mexico by Canon and imported and sold into US.
·         Problems with Gray Goods
o   Undercut process
o   Effects market, competition, incentives
o   Think AIDS medication – needs to be cheaper in Africa
·         Custom Regulations are restricted to the protection of registered trademarks
·         To stop at border:
o   Must be foreign made
o   Owned by citizen of USA
o   Does not apply if foreign and US trademarks are owned by same party or license agreement
§  Commonly-owned exception because “owned by” and “merchandise of foreign manufacture.”  Owned by – ambiguous – two entities can own, who owns? We don’t know.  Foreign manufacture – what if it’s a foreign manufacture by US citizen?