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Trademarks and Unfair Competition
SUNY Buffalo Law School
Bartholomew, Mark

Trademark and Unfair Competition
Professor Mark Bartholomew
Fall 2013
Graeme B. Dinwoodie & Mark D. Janis, Trademarks and Unfair Competition: Law and Policy (3rd edition, Aspen Publishers, 2010)
 
Foundation and Purposes of Trademarks and Unfair Competition Law
 
Two Tenants of Trademark Protection
·         1. Consumer-Efficiency: To protect the public and maintain confidence in purchasing legitimate products
·         2. Protecting Mark Holder’s Investment: To protect the owner’s (company’s) time and money (*investment) in presenting the product to the public
·         Trademarks can be industry specific, i.e. Delta – airline, faucets & sinks, gas station/car washes, and fast food chains
 
Rule: Trademark cases are based upon the party’s right to be protected in the goodwill of a trade or business, not the subject of property
Hanover Star Milling Co. v. Metcalf (1916)
·         The primary function of a trademark is to identify the origin or ownership of the article to which it is affixed; there is no right of property in the mark, unless that mark is affixed to a particular species of goods
·         Trademark law is part of broader unfair competition law
 
Significance: The law recognizes Trademarks as psychological symbols, lead us to what we want or believe we want. Once the mark produces desirability it has value, and an owner of that mark can seek legal redress if another poaches that mark…
Mishawaka Rubber & Woolen Mfg. Co. V. S.S. Kresge Co (1942)
 
RULE: One merchant shall not divert customers from another by representing what he sells as emanating from the second
Yale Electric Corp. v. Robertson, 2d Cir. (1928)
Trademarks acts as authentic seals
Unless the burrower’s use is so foreign to the owner’s as to insure against any identification of the two, it is unlawful
 
Prestonettes, Inc. v. Coty (1924)
Facts: A company used another’s product as an ingredient and used their trademark in the ingredient list.
Holding: A TM only gives the right to prohibit the use of it so far as it protects the owner’s goodwill against the sale of another product as his à When it does not deceive the public
Not a “naked right…to prohibit the defendant from making even a collateral reference to the owner’s mark”
 
Trademarks and Competition; The Recent History, Daniel M. McClure (1996).
Economic theory of trademark protection stemming from the Chicago School to trademarks -Judges Easterbrook and Posner
Easily definable trademarks reduce the cost for consumers in searching for what they desire, those lower costs lead to a more competitive market
Induces a supplier to make a higher quality product and to adhere to a consistent level of quality
Rejects a formulistic conceptualized approach to trademark law, rejecting trademark vocabulary like arbitrary and suggestive and focusing on the functions of the trademark
Enjoining infringement prevents free-rider problem
 
Dilution Redefined for the Year 2002, Jerre B. Swann (2002).
Information age has made brands the most consumer friendly symbols in our society à Brands don’t just sell a product, but sell an experience, fulfillment, feeling of culture icons
Psychological response to a brand just as important to psychological response to the product
 
Trademarks Unplugged, Alex Kozinski (1993)
Trademarks to not just identify product, but to enhance or adorn them, even to create new commodities altogether
Words, symbols, and images may work themselves so deeply into popular culture that originator of the trademark or logo cannot retain complete control. à must understand that the mark or symbol or image is no longer entirely its own, and that in some sense it also belongs to all those who have received it and integrated it, although this does not imply total loss of control
So long as trademark law limits itself to its traditional role of avoiding confusion in the marketplace, there is little likelihood that free expression will be hindered
 
(National) Trademark Laws and the (Non-National) Domain Name System, Graeme B. Dinwoodie (2000).
Four pertinent aspects:
·         Domain names say very little about the nature or location of the registrant
·         Accreditation of registrars is done by a single body ICANN, there is uniformity of registration practices
·         There cannot be two identical names in top level domains
·         Domain names are registered on a first come, first serve basis
 
 
Elvis Presley Enterprises, Inc. v. Capece, 950 F.Supp. 783 (S.D. Tex. 1996) (5th Cir 1989) (CB 27)
Facts: EPE is a TN corporation formed under the terms of Elvis’ testamentary trust, and is an assignee of dozens of trademarks, copyrights, and publicity rights, however, none are registered service marks for use in the restaurant and tavern biz. à D opened a nightclub in TX named “The Velvet Elvis.” à EPE sent a cease and desist letter threatening legal action if D opened a bar with EPE’s trademark, “Elvis” in the name. Decoration featured Club- kitchy, parody of the 60s, velvet paintings, pinups of naked women, lava lamps, beads, raunchy. π sued for unfair competition, trademark infringement, and dilution under both the common law and Lanham Act, and infringement of the right of publicity
 
 
 
 
Test
Factors
Explanation
Elvis Case
The focus is whether a defendant’s use of a mark and image creates a “likelihood that an appreciable number of ordinarily prudent purchasers are likely to be misled, or indeed simply confused, as to the source of the goods in question.”
 
 
1. Strength and type of trademark allegedly infringed
Stronger the mark, the more likely it is to be confused
 
Elvis is a very strong mark BUT how Velvet Elvis is using it is not likely to invoke the actual mark
 
2. Similarity of design between the two marks
A subsequent user may not avoid likely confusion by appropriating another’s entire mark and adding descriptive or non-descriptive matter to it – exception when the marks in their entireties convey two different meanings
D’s service mark falls within narrow exception, creates a very different overall impression, velvet Elvis is symbolic of a faddish art style that belongs to the culture that created it.
 
3. Similarity of the products or services
A trademark owner has a definite interest in “preserving avenues of expansion” and is entitled to protection in related fields where the possibility for future growth e

and discoveries
·         Court: didn’t think that it took that much ingenuity to come up with a TM, it is just grounded in the use of it over time
o   No necessary relation to invention or discovery
o   Result of accident, rather than design
o    Prototypical Inventor: Thomas Edison vs. VanGogh (artist) à don’t think of TM inventors as that, i.e., Paris Hilton “That’s Hot”
§  Had to wait a while for TM protection after these cases
Copyright and Patents Law has been preempted by Congress, where State law exists for trademarks and unfair competition
 
Comparison with Other Types of IP
 
Copyright
Patent
Trademark
What can be protected?
Original Works of Authorship
Novel OR Non-obvious Process, Method, Etc. 
Any symbol or device that is capable of identifying the source of goods
What is excluded?
Ideas
Abstract Ideas
Natural Processes
Not Distinctive
Functional
Howa are rights acquired?
Fixation in a tangible medium of expression
Federal Registration
Use in Commerce
Duration
Life of author plus 70
20
Potentially Forever
How far do rights extend?
Exclusive right to make copies
Exclude others from making, selling, or practicing the invention
Right to Prevent Confusing Uses (limited right)
 
 
 
 
Originality
Easier Standard
Tougher Standard
High Standard
 
 
Organization of TM System
 
 
U.S. Patent and Trademark Office (PTO)
Original jurisdiction over applications for a federal trademark
 
Trademark Trial and Appeal Board (TTAB)
Applicant Can Appeal PTO Decision Here
 
Court of Appeals for the Federal Circuit
If dissatisfied with TTAB decision, applicant can appeal here
 
OR District Court
OR bring an action here
 
 
 
 
 
 
 
 
 
 
 
Rule: When examining domain name marks, the PTO must evaluate the commercial impression of the mark as a whole, including the TLD indicator. But it may weigh the individual components of the mark to determine the overall impression or the descriptiveness of the mark and its various components
In Re Oppedahl & Larson, LLP, Fed. Cir. (2004).
Facts: Trademark Trial and Appeal Board (TTAB) affirmed the PTO’s refusal to register the mark patents.com to the appellant. PTO found that generally, domain designation as part of proposed mark makes it unregisterable à TLDs generally serve no source-indicating function”