Trademark Outline

 
Trademark
Sunder
Spring 2014
 
 
 
Unfair Competition
Courts will generally deny state unfair competition claims for TM
 
Restatement 3rd Unfair Competition
One who causes harm to the business of another is NOT subject to liability unless there is an appropriation of intangible trade values (trade secret misappropriation) or from unfair method competition
 
The Freedom to Compete
The freedom to compete and engage in business and to compete for the patronage of prospective customers is a fundamental premise of the free market system.
The freedom to compete necessarily contemplates the probability of harm to the commercial relations of other participants in the market – law isn’t about protecting against competitors
 
INS v. AP (1918)
Protected “hot news” from misappropriation of value for some limited time on the theory that INS should not “reap where it has not sown” (prevents free riding)
News valuable for short amount of time and had economic value
Value = right
INS is narrowly tailored to its unique set of facts
 
Cheney Bros v. Doris Silk (2nd Cir 1929)
Absent rights at common law or under statute, fashion designs can be freely copied.
INS was not extended to this situation
 
Sears Roebuck v. Stiffel (1964)
If a product doesn’t hold a patent or copyright, then copying won’t be prevented
Even some confusion not enough ground to prevent copying where there is no patent.
Labeling can stop confusion
 
Bonito Boats v. Thunder Craft Boats (1989)
State law prohibits copying of boat designs not protected by patent or copyright is strike down
Concern with possibility of state-created monopolies
Strong federal policy favoring free competition in ideas that don’t merit patent protection
 
TM History, Theory & Application
Trademark – Any device that signals (shorthand signals) source of good or service to consumers.
As long as people know mark came from single source, it doesn’t matter if people don’t know which product made it (single yet anonymous source)
 
Historically: TM protected by common law.
Under state law, business could acquire TM by using mark in connection with goods or services
 
Trade-Mark Cases (1879)
Rejects TM statutes as unconstitutional since Congress doesn’t have authority to make law under Copyright and Patent clause.
 
Lanham Act of 1946 – Bases federal TM law under Interstate Commerce Clause
TM awarded to those who are first to use 1) a distinctive mark 2) in commerce
Protects against uses likely to cause consumer confusion
For “famous” marks, protects against dilution or whittling away of distinctive source signaling feature of marks
Includes anti-cybersquatting provisions
 
Types: Trademark, trade dress, brand names, service mark, certification mark, and collective mark
 
Scope: 1) Likelihood of consumer confusion 2) Dilution of famous marks
 
How to Get a TM: 1) Use in commerce 2) Federal registration
Purpose: Regulate unfair competition; Deception, fraud, confusion; Dilution of famous marks
 
Term: Rights do not necessarily expire if they continue to 1) signal source and 2) used in commerce
 
Policy for TM Protection
Overarching Foundational Policy: Prevent Consumer Confusion
Reduces search costs
Shorthand for quality – economical speech
Incentivizes producers to maintain quality and build goodwill
Downside: Monopoly Property Rights increase costs, decreases competition in the marketplace
 
Hanover v. Metcalf (1916)
At common law, person who first adopts and uses a TM is its owner
TM is not a property right per se. TM is to prevent another’s use that interferes with goodwill of a business or association of a product with a company.
 
TM Subject Matter
Trademark Subject Matter: Words, Names, Symbols, Slogans, numbers, letters, Color, Sound, Packaging, “look and feel”, Descriptive marks that have acquired secondary meaning, Any other designation capable of signaling source
Not TM: Generic marks, Functional marks, Descriptive marks w/o secondary meaning
 
Kellogg v. National Biscuit, Co (1938) – Trademark
Name “shredded wheat” isn’t trademarkable
Name is generic – it has been expropriated by the public due to widespread use to refer to the product and not the source
Pillow shape of the biscuits isn’t trademarkable
Shape is generic – form is associated with the product, not the producer.
Shape is functional – pillow shape affects cost and quality
Patent expired so name and shape passed on to the public
 
Name
Coca-Cola v. Koke (1920)
Koke argues that the name Coca Cola is misleading since the product no longer contains cocaine. Because of these misrepresentations, Coca Cola loses its TM infringement claims.
Truth about a product isn’t a part of getting a trademark.
“Single source” doctrine: A TM just needs to convey the product came from a single source.
 
Slogan
Protectable if it is distinctive (signals source)
Non-discrimination principle: A mark is not denied protection on account of its nature
 
Personal Names
Common law reluctant to TM first names
Few have secondary meaning
Want people to have businesses in their names
Names give information
Lanham Act says surname can be TM if it has secondary meaning
 
Peaceable Planet v. Ty, Inc (7th Cir. 2004)
Is Niles the Camel TM protectable? Yes.
Niles is a suggestive name for a camel toy, therefore it is automatically TM protectable
 
Mishawaka v. Kresge (1942) – Symbol
Red rubber symbol on sole of shoes acquired “commercial magnetism”
Competitor prohibited from copying the symbol because competitor product is inferior.
Passing off someone’s inferior product for another’s superior product is a problem and interferes with goodwill of business.
If competitor creates better product, then device signals product and not source
Trade Dress & Color
Trade Dress – Packaging of product, shape, design, look and feel, color, etc
Color – TMable when distinctive (ex. in arrangement, pattern) and signals source.
“Aesthetically functional” – ornamental appeal of an item which without access to would put competitors at an unfair advantage
 
Qualitex v. Jacobson Products (1995) – Color
Colors can be TM as long as it signals source – “almost anything at all that is capable of carrying meaning”
Color is descriptive mark that always requires secondary meaning
Subject matter only limited by functionality doctrine – Is it essential to use or purpose of article or does it affect cost or qua