Trademark
Professor Krafte
Spring 2011
Foundations and Purposes of Trademark and Unfair Competition Law
A. Introduction to trademark and unfair competition law
1. IP Differentiation
a. Copyrights and patents are supposed to promote creation, not monopolies (balance)
b. Trademarks – creativity isn’t an issue so they can last forever (not the product itself); it’s about interaction with the consumer
i Anything can qualify as a mark (Qualitex)
ii Tells you where, not what
iii Trademark protection goes back to commerce clause
iv Ontological state does not matter
v TM law is not limited in time (generally as long as you keep using it in commerce)
vi TM is about protecting the consumer
2. Sources and nature of trademark rights
a. TM is a source identifier (don’t want to say what it is)
i Protects any symbol or device that is capable of identifying the source of goods
ii The trademark cases
o Is federal trademark law proper according to the constitution?
§ Art 1 § 8 Clause 8
– Trademark is not advancing any science so it does not belong under this clause
§ Commerce Clause
– The statute regulates trade among people of a single state as well so it does not belong here
iii TM Serves 2 purposes
o Protects consumers from being confused or deceived about the source of goods or services in the market place (consumers have no standing under the lanham act)
o Encourages merchants to stand behind their goods or services by protecting the goodwill they have developed in their trademarks.
§ Hanover star Milling Co v. Metcalf
– The trademark is treated as merely a protection of the good will, and not the subject of property except in connection with an existing business
– A TM only gives the right to prohibit the use of it so far as to protect the owners goodwill against the sale of another's product as his; when the mark is used in a way that does not deceive the public, there is no injury to the owner.
– Essential element is the same for trademark cases as in unfair competition cases (the sale of goods of one manufacturer for those of another)
iv Other purposes of trademarks
o Mishawaka Rubber & Woolen MFg. Co. v. S.S. Kresge Co.
§ TM's are a merchandising shortcut which induces a purchaser to select what he wants, or what he has been led to believe he wants
– Want to convey through the mark to the potential customer the desirability of the item which the mark appears.
o Yale Electronic Corp. v. Robertson
§ Merchant B shall not divert customers from A by representing that his products came from A.
§ B would be borrowing A's reputation
o Prestonettes, Inc. v. Coty
§ Trademark does not give a right to prohibit a person from making a collateral reference to another's mark. NOT A RIGHT IN GROSS
§ TM only gives the right to prohibit the use so far as to protect the owner's goodwill against the sale of another's product as his.
v Notes
o Lanham act – Congress extended federal TM protection only to marks used in interstate commerce after THE TRADEMARK CASES
o Trademarks consist of a
§ signifier (“tangible symbol”)
§ Signified (“the goodwill to which the signifier refers, which identifies and distingushes the product/service”)
§ Referent (“the product/service to which the mark refers”)
3. The Nature of Unfair competition Law
a. We like fair competition because it helps consumers
b. International News Service v. Associated Press
i AP published news reports, and INS copied AP's stories and sent them to their own member newspapers.
ii SC upheld a preliminary injunction prohibiting INS from doing this for a short period of time
o INS says that if they read the paper they have the right to share what they read with others, CT says this would be ok if not for profit but when INS is sharing the news for a commercial purpose its not ok.
iii Because INS sold AP's goods as its own, it is guilty off unfair competition by virtue of misappropriation.
iv Anytime you see anything that reaps where you have not sewn, there is unfair competition issues (but not trademark infringement and in this case, no copyright infringement because dealing with facts) – “sweat of the brow”
v Unfair competition was traditionally palming off; here they were trying to make it look like someone else’s product was theirs.
o Though it was known that consumers would discuss the news, competitors had to wait a certain time before taking it
c. Dastar Corp. v. Twentieth Century Fox Film Corp.
i For purposes of §43(a), the “origin” of goods and services refers only to their physical origin (not scientific or intellectual origin)
o §43(a) does not have boundless application as a remedy for unfair trade practices
o limiting rationales on unfair competition:
§ certain actions for unfair competition under §43(a) should not be recognized where they would conflict with provisions of copyright law
§ certain actions for unfair competition under §43(a) should not be recognized where they would allow plaintiffs to circumvent limits imposed by other SC case law on causes of action for TM infringement
4. Purposes of Trademark Law
a. Consumer harm protection
i Transactional harm
ii Counterfeiting/quality control
b. Source harm
i Wasting time, energy, and money
ii Dilution/tarnishment hurts reputation/sales
c. Alternatives
i Have to read all labels
ii Buy multiple products
d. Rights
i Not full property right in that you cannot exclude completely
e. Surplus value
i Brand itself has value, along with trademark
B. Modern Marketing and Trademark Law
1. An Illistration
a. Elvis Presley Enterprises, Inc. v. Capece
i EPE sued Capece for opening “The Velvet Elvis” a bar. EPE said that “Elvis” was its trademark and Capece infringed it.
ii EPE needs to demonstrate that “The Velvet Elvis” would likely to cause confusion in the mind of ordinary consumers as to the source, affiliation, or sponsorship of the bar.
iii Trademark infringement vs. unfair competition
o TM infringement
§ Goal is to provide the holder the exclusive right to use a phase, word, symbol, image, or device to identify and distingusih a product.
o Unfair competition
iv Likelihood of confusion factors
o The type of TM alleged to have been infringed
§ Attempt to parody
o The similarity of design between the two marks
§ Makes you think of the era/style of art
o The similarity of the products or services
o The identity of the retail outlets and purchasers
o The identity of the advertising medium utilized
o The defendant's intent
o Evidence of actual confusion
v Court relies heavily on parody to find for the Capece on likelihood of confusion
o Also looked at social commentary which was not for the purpose of trading on Elvis’ good will
vi Advertisements
o Showing pictures of elvis in connection with the bar and without reference to parody can cause likelihood of confusion.
o Actionable for infringemenet and unfair competition
o “ELVIS” was big and “VELVET” was small
§ Court asked if they were trying to benefit from Elvis’ name
vii Dilution
o Does not deal with confusion
o No blurring – need almost similar marks
o No Tarnishment because it is not likely to prompt an unsavory or unwholesome association in consumers minds with the Elvis TM, needs to be worse than dealing with something tacky
Creation of Trademark Rights
1. Distinctiveness
a. TM needs to be distinctive because you need to be able to signify source and competitors need to be able to actually describe their product.
i Worried about taking things out of the public domain that will harm competitors
o APPLE for computers is ok
o APPLE for apples harms competitors
B. The Spectrum of Distinctiveness
1. Abercrombie & Fitch Co v. Hu
ay very depending upon whether the mark has prior TM significance
i 2 tests primary significance and canfield test
o Primary significance test
§ What is the class of goods and services; AND
§ Does the relevant public understand the term to refer primarily to that class
o Canfield Test
§ Is there a limited number descriptive terms for the product? (limited population)
d. Concern is not with mark holder, but with consumers ability to discern the source of the mark.
2. Filipino Yellow Page, Inc. v. Asian Journal Pubs, Inc.
a. FYP sued AJP for TM infringement and unfair competition when AJP published Filipino Consumer Directory. AJP moved for SJ saying the term was generic. FYP rebutted that it was descriptive and had acquired secondary meaning. (Dist Ct held for AJP)(This court affirms)
i FIRST ASK IF THERE ARE RIGHTS AND THEN GO TO INFRINGEMENT
b. BURDEN OF PERSUASION
i Registered marks
o A presumption of validity places the burden of proving genericness upon the defendant
o Presumed valid because (PTO has already looked at it to see if the TM is valid)
ii Unregistered marks
o The plaintiff has the burden of proving nongenericness once the defendant asserts genericness as a defense
o This case FYP has not registered Filipino yellow pages so it bears the burden of showing that it's TM is not generic.
iii Where the public is said to have expropriated a term established by a product developer, the burden is on the defendant to prove genericness. (MURPHY BED)
c. Test for generic “Who are you what are you test”
i If the primary significance of the TM is to describe the type of product rather than the producer, the trademark is a generic term and cannot be a valid trademark.
ii Ultimate test – of genericness is “how a term is understood by the consuming public”
d. Anti dissection rule: the validity and distinctiveness of a composite TM is determined by viewing the TM as a whole, as it appears in the market place. (picked apart see infra)
i MUST LOOK TO SEE HOW CONSUMERS SEE THE TM.
ii Surgicenter does not add anything distinctive to surgery center.
iii Surgicenters of America, Inc. v. Medical Dental Surgeries Co.: SURGICENTER is generic, because (1) surgery is generic, (2) center is generic, (3) surgicenter retained the generic quality of its components, did not constitute a deviation from normal usage or an unusual unitary combination.
e. FYP used the term generically and this was damning to them
i LA times (used generically)
ii P didn’t enforce against third party (this is good on a list but never good enough by itself)
f. AJP still needs to stay away from using their same font, layout, photos, etc.
3. Beanie Baby – says no evidence of secondary meaning doesn’t say no secondary meaning;
a. Is it protect or merely descript?
i DC says no descriptive name; Posner says reluctant to use personal names as trademark because people want to use their own name to open bus and should be able to if estab 2d meaning; some names are super common; do not want to prevent person from using name in biz cuz you may deprive consumers of biz but camels don’t go into biz and Niles is not a common name
