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Trademarks and Unfair Competition
University of Illinois School of Law
Maggs, Peter B.

Trademark and Unfair Competition Law
Chapter 1: the competitive market system and the right to compete
A. unfair trade practices law and the competitive market system
B. the right to enter markets and to compete freely
        I.          Fair and Unfair Means of Competition
A.      Schoolmaster’s Case (pg. 5, 1410): New school undercut the prices of the old school. It did intentionally cause harm but the manner was not improper. This is an example of fair competition.
B.       Tuttle v. Buck, pg. 7 (1909): ∆ entered into the barbershop business only to drive π out. π said false, libelous things about ∆’s barbershop.
1.       §786 Rst. 2nd of Torts, Competition as proper or improper interference: causing injury is presumed bad unless you have an excuse from (a)-(d).
a)       W/o the slander: Part (d) supports π’s position
2.       Rst. 3rd of Unfair Competition, §1 General Principles: If you cause injury, you are not subject to liability, unless you do (1)-(3).
a)       Case thrown out of court: public benefits by the reduced cost of haircuts.
3.       Maggs: Rst. of Unfair Competition is right nd T v. B was decided wrong.         
C.        Natural Monopolies: If the town is isolated and the town can only support one barber, this creates a natural monopoly. There might be brief fights over the monopoly and this benefits the public by giving brief respites from monopolistic pricing.
D.      Prima Facie Tort Theory: Every intentional infliction of harm is a prima facie tort and it’s up to ∆ to prove an excuse. 
1.       Opposite to the Rst. of Unfair Competition.
2.       Slander: deceptive marketing, easy case
3.       Harm to Public Test
a)       School: not harmful to public
b)       T v. B: lies about sanitary conditions takes choices away from consumers
c)        Shooting at another ship is harmful.
C. interference with contractual relationships
Intentional inducement of breach of contract
        I.          Price v. Sorrell: C1 and C2 are bound by a contract. BG (Bad Guy) does something wrt the contract. Hospital is C1 and Collection Agent is C2 Alleged debtor’s lawyer is BG. BG wrote a letter to C1 saying that C2 is undesirable.  C2 sues BG for punitive damages.
A.      If Hospital fired the collection agent because of BG. Apply Rst. of Torts §766, “induced or caused a 3rd party not to perform.”
B.       Hospital didn’t sign a contract w/ Collection Agent and now decides not to hire him. Apply §766B, Intereferes with prospective contract. 
1.       Not liable if you kidnap the Collection Agent and hold him so he misses the interview. The lawyer is not a competitor
C.       Trucking company contracts with lumber mill to bring logs out of forest. BG blocks the raod causing increased expense for the trucker because he has to go 50 mi out of his way. Applying §766A. One = Roadblocker. Another = Trucker. 3rd Person = lumber mill expecting the shipment. (One = lawyer, Another = CA, 3rd Party = Hospital).
1.       Court rejected §766A.
a)       CA’s job wasn’t made more difficult by the Lawyer’s disparaging letter.
intentional interference with prospective contractual relation
A.      Doliner v. Brown: Apply §766B, Did Brown do anything improper? The πs could have gone to Brown and made him sign a contract not to steal the deal and keep the details secret. They didn’t and didn’t protect their interest.
1.       Note 2, pg 24: Texaco v. Pennzoil: Existence of a contract. Had shaken hands, good enough for a contract. T/f Texaco interfered.
a)       In an auction it’s ok to offer a better deal. 
b)       If there is already a contract and you put in a higher bid that’s different. 
(1)     Can get into trouble if you think there isn’t a contract and put in a bid.
Chapter II: acquiring trademark rights
a. Introduction
B. Jurisdiction over trademark suits
International Order of Job’s Daughters v. Lindeburg & Co.BU, pg. 28 (1980) 
No state law wrt trademarks, courts will apply Federal Law.
Must register your mark or register an ITU, intent to use, to be protected. 
C. Obtaining and protecting trademarks at common Law
        I.          Actual/Bona Fide Sales
A.      Blubell v. Farah: Both start using the trademark Time Out w/o registering and w/o knowledge of the other. Farah sent clothes to the regional manager: Fake sale of a real product – doesn’t count. Blue Bell sent out pants with 2 tags on it: Real sale of a fake product – not good enough. Court said that Farah got to a real sale first.
B.       Token sales: abolished
C.       Rst. §18: Must actually be used as a mark.
1.       Farah: not prospective purchases in the ordinary course of bus

ings to produce: more likely the court will find you got the ITU in bad faith. 
2.       Maybe enough to show intent: produce a document that making all products out of the country and when export will use the mark.
a)       B4 File an ITU, have a doc. in corporate records showing that you intend to make the stuff.
       II.         Goods used in Commerce
A.      White v. Paramount Pictures Corp, pg 43 (1997): White wants to apply for registration of the mark “The Romulans” and Paramount opposes it. White’s application is denied.
1.       The game was not a good: not reached by court
2.       No Bona Fide use in Commerce: mostly distributed for free. 
a)       The dissemination not enough
b)       Token Use: reflects a continual effort to create a viable business in the goods so marked; not sporadic, casual, or nominal shipment of goods bearing a mark. Was ok b4 this case
(1)     Today’s Standard: must use “in ordinary course of trade”. This standard varies by industry, but is definitely higher than Token Use standard. 
(2)     White sold 20-25 games last year, at most $12.50. Not enough for Token Use so not enough for the new standard.
c)        If Boeing sells 50 new planes, they are allowed to register. This is ordinary course of trade for the aircraft industry. 
d)       Defn of Commerce for Trademarks law: anything Congress can constitutionally regulate under the Commerce Clause.
B.       Service marks and Collective marks.
1.       Service: entitled to same protection as trademarks
2.       Collective: marks put on by organization to show that the goods conform to that standard.
a)       Serta Perfect Sleeper: Serta doesn’t make mattresses, just approves them.
b)       Marks must be given impartially to anyone to meets the certification rqmts. 
3.       Different from Trademarks, which must be associated with goods.