I. The Competitive Market System and the Right to Compete
a. Unfair Competition
b. Benefit for Consumers – no confusion, low cost/less price, more choice, encourage quality control
c. Role of Laws on Unfair Trade Practices and Consumer Protection in the Econ System
i. The right to enter markets and to compete fairly
1. Existing concern viewpoint – the new entrant seems guilty of “unfair” competition particularly if he cuts prices to entry
a. Consumer, public interest, and new entrant viewpoint, it’s just fair competition
d. The Schoolmaster’s Case (1410) – Lowering prices as a result of normal competition is not a cognizable harm because the people are benfitted
e. Tuttle v. Buck – Must be no interference in another’s right to conduct business (taking a loss to drive another out of business, etc)
f. Price v. Sorrell – an action for tortious interference with a K requires “an actual breach, failure to perform, OR termination of the K” and not simply that performance became more expensive or burdensome because this is speculative
g. Dolner v. Brown – Competitor may “interfere” with another K’s expectancy by picking off the deal if in advancing his own interest, he refrains from employing wrongful means
II. Trademarks: Acquiring Trademark Rights **Reg. in force for 10 years**
A. Federal – Lanham Act, power granted under the Commerce Clause
B. Lanham Act §45: A TM is a symbol w (word, name, device or combination thereof) adopted and used by a merchant to identify his goods and distinguish them from articles produced by others
C. Lanham Act §1501
a. Advantages – Creates incentives or owners to keep quality high to entice consumers and garner market share; Gives consumers consistency in quality each time they go to the market place and makes information about products manageable; Could be immoral to allow other merchants to capitalize on the good will and monetary investment of other merchants.
b. Disadvantages – Creates a brand monopoly for the seller, thereby decreasing entry into the market and not motivating sellers to keep their brand quality high (barriers to entry); Advertising can be considered a wasteful expenditure when money can be spent elsewhere; Creates too much of a monopoly over words and such
D. 2 paths of Lanham Act TM Registration:
a. §1(a) Application for Use of a Trademark: requires that you use the trademark as a precondition before actually filing your application.
1. You fill out the application.
2. You have to make a certain # of representations:
i. Allege that you have used your mark in interstate commerce;
ii. As evidence, you have to submit specimens of use, such as labels, boxes, etc.;
iii. Indicate the GOODS on which you plan to use the mark – you only get a mark for a good in a certain context;
iv. Indicate what administrative category your goods fall into – there’s an international chart of classes, such as cosmetics, etc.
3. You must pay a fee per class of goods – if you want to register the mark for multiple classes, you need to multiple fees.
4. TM Attorney examines your application at the PTO nd verify your actual use of mark; determine whether mark and use are permissible under §2.
5. If approved, Attorney sends mark for publication in the Gazette with a description
6. 30 days given to file an opposition.
i. If opposition filed, case sent to the Trademark Trials and Appeals Board (TTAB), staffed by admin law judges. Called an “inter partes” proceeding when between 2 parties on an opposition. Opposer – party who filed opposition; applicant – person seeking registration.
1. Paper trial – board makes determination. Party who is unsatisfied may appeal decision to the Federal Circuit.
2. Alternatively, a party may file a de novo claim in a federal District Court; subsequently, to a federal Court of Appeals. This is a good choice if you want a chance to supplement the record with more facts.
ii. If the TM Attorney decides your mark doesn’t qualify, you get an ex parte proceeding before the TTAB (In re Jane). The rest of the appellate procedure is the same.
7. The party who is ultimately successful gets registration for 10 years – renewable indefinitely, as long as the mark is being used. At the 5-year-mark, you have to confirm that you are using it.
b. §1(b) Application for Bona Fide Intention to Use Trademark (as of 1998): you can begin the registration process before you actually begin using the mark – “Intent to Use” or “ITU” application. [applicant seeks reg 1st, then uses even though no reg will issue until the mark has been used] 1. Swear your bona fide intention to use mark in the next 6 months.
2. After TM lawyer reviews it, and approves, published in Gazette.
3. 30 days allowed to filing of opposition (see above).
4. If no opposition, NO REGISTRATION issued notice of allowance.
5. You have 6 months to commence use.
6. Once use has commenced, you file a Statement of Use (SOU).
a. If you don’t use within 6 months, you abandon the application and have no federal rights.
b. Alternatively, if you use before the notice of allowance, you may file an Amendment to Allege Use, and you skip a step and speed up the process proceed as under §1(a).
. Blue Bell). A single use may be sufficient if followed by continuous commercial utilization.
ii. Allard Enterprises, Inc. v. Advanced Programming Resources, Inc
iii. Affixation – The Lanham Act requires that a TM be “placed in any manner on the goods or their containers or the displays associated therewith…” 15 U.S.C. §1127
1. Strict affixation is not required as a condition of federal registration and the use of the mark on shelves or signs at the point of purchase would be satisfactory even if the products do not carry the TM.
iv. Use (§43 of the Lanham Act) – establishes priority (Type, where, quantity)
1. Statutory Language Here
2. White v. Paramount Pictures Corp.
a. Use in commerce is the bonafide use of a mark in the ordinary course of trade which is typical in a particular industry, and not merely to reserve a mark
b. It cannot be a token use defined as sporadic casual or nominal shipments of goods bearing a mark. The use must “reflect a continual effort to create a viable business in the goods so marked.”
c. A mark shall be deemed to be in use in commerce when it is used or displayed in the sale or advertising of services and the service are rendered in commerce
3. Per Zazu v. L’Oreal: Under common law, must win the race to the marketplace, but under federal law, registration allows slight sales plus notice in the register as a substitute for substantial sales without notice. 15 U.S.C. 1051(a)
4. Types of Use – a merchant must make a genuine commercial sales or advertising of the relevant goods to (1) obtain common law TM rights or (2) to be entitled to federal registration.
a. If federal TM rights are at issue, the sales in question must affect interstate commerce.
b. By insisting on use, the law prevents businesses from reserving brand names in order to make their rivals marketing more costly.
c. Valid First Use
i. Blue Bell, Inc. v. Farah Manufacturing, Co – two companies created “Time Out” Logo for men’s pants. Blue Bell sued Farah for TM infringement and unfair competiton and seeking to enjoin use of the TM.
Must be bonafide (Farah attached TM to old line of pants – so bad