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Trademarks and Unfair Competition
University of Michigan School of Law
Litman, Jessica D.

Jessica Litman
Trademarks and Unfair Competition – Fall 2013
Trademarks and Unfair Competition Law: Case Materials: Ginsburg, Litman, Kevlin – 5th Edition
·         Central Question of Trademarks: Will members of the public be confused?
o    If something is likely to confuse consumers, we allow the owner of a mark to enjoin the sale of the confusing product
·         Emphasis on Competition
o    Fed wants people to be able to compete, but we also want people to tell goods/services apart
·         Negatives/Inefficiencies of Trademark Law
o    Some goods are fungible, so trademarks just drive up prices due to marketing
o    People will try to cheat the system
·         How to acquire a trademark
o    1) register the mark with the PTO
o    2) use a mark in connection with the sale of your product/service (common law TM)
o    NO REQUIREMENT TO REGISTER A MARK! But if you do, there are advantages
·         Trademarks vs. Copyright vs. Patent vs. Trade Secret
o    Trademarks
§  A word, logo or package design, used by manufacturers to identify its goods and distinguish them from others (brand names, logos, trade dress, service marks, etc.)
§  Infringement Standard: likelihood of confusion, mistake or deception as to source; or dilution by blurring or tarnishment
o    Copyrights
§  Promotes artistic creativity for a limited time by giving creator exclusive rights to reproduce, distribute, and display the work, and to authorize others to do any of these things, for a certain period of time
o    Patents
§  Allows patentee to exclude others from making, using, offering, or selling an invention w/in the US
§  Inventions must be: 1) novel (new and not previously known); 2) non-obvious to a person of ordinary skill in the relevant art; 3) utility (must have useful purpose and is not frivolous)
§  Utility patent: for functional things; Design patent: for ornamental designs; Plant patent: for new plants or seeds
§  Granted only by the federal gov
o    Trade Secrets
§  Protect proprietary information of a company
·         Trademark law is a subset of the larger field of unfair competition law; both are governed by essentially the same principles
·         Unfair competition involves a defendant’s passing off of his or her goods or services as originating from the P
·         3rd Restatement of Unfair Competition
o    Not liable for acts harming the commercial relations of another by engaging in business UNLESS (a) the harm results from (2) infringement of trademarks and other indicia of identification
o    POLICY: Emphasis on freedom to compete, presumption against unfair comp. Burden on P claiming unfair comp to est liability
o    POLICY: View that some copying is good; want people to copy products, but still want to protect against consumer confustion
·         History of Unfair Competition Cases:
o    Int’l News Service v. Associated Press
§  Landmark case for general common law property right against “misappropriation” of commercial value
o    Cheney Bros v. Doris Silk
§  Copied silk design; w/o common law or statutory protection, others may imitate another’s creation
§  Continues lack of TM protection; distinguishes itself from Int’l News Service
o    Sears v. Stiffel Co
§  Copying unprotected products is something any producer has the right to do
§  State law prohibiting copying of something not protected by copyright or patent law conflicts with objectives of Fed Patent Law
o    Compco v. Daybrite
§  Overturns Sears; Fed patent law does not preempt state laws requiring identification of products
·         History of Trademark Law
o    Until 1946 Lanham Act, only common law trademarks existed; no universal national protection available
o    Trade-Mark Cases
§  SCOTUS holds that TM statute is unconstitutional; reserves the power to regulate trademarks to the States
o    Hanover Milling v. Metcalf
§  Displays old view of trademarks: trademarks are only property in the sense that they prevent another from passing off goods as being the TM holders
o    Stork Restaurants v. Sahiti
§  Modern view of TMs: dilution law
A. Important Lanham Act Sections
·         §2: Sets standards for registering a TM on the Principal Register
·         §32: Trademark infringement for registered marks; protects against unauthorized uses that are likely to confuse or mislead consumers as to the origin of goods or services
·         §43(a): Federal unfair competition cause of action for parties; includes infringement of unregistered mark
·         §43(c): Likelihood of Dilution
·         §43(a)(1)(B): False Advertising
B. Trademark Defined
·         Litman’s Definition: Any symbol used to distinguish the goods of one business from another
·         Common Law Trademark: Use of a mark in connection w/ the sale of goods in a market (protected in that market)
·         Statutory Trademark: Registered with the PTO on the principle register
B. Duration of Trademark Protection
·         Common Law Trademark: rights of trademark owner only last as long as the owner continues to use the mark
·         Registered Trademark: Registration must be renewed; failure to renew will result in registration benefits being lost (becomes CL trademark so long as in use)
C. Geographic Scope of Protection
·         CL Trademark: Under §43(a) and CL trademarks, the rights of a TM holder are limited to the geographic area where the owner was the first to use the mark and has continued to use it
·         Registered Trademark: Nationwide rights;
o    Territorial Use Exception: registration doesn’t displace any preexisting common law rights, just restricts those common law rights to the geo markets where the prior use has taken place (§33)
A. Used to Distinguish Goods or Services
·         The mark must be used to identify the mark owners goods or services
·         Advertisements: ad agencies cannot trademark the slogans they make for other products b/c they’re not using the slogan as a source identifier for their own services; the client the ad is for can trademark it b/c its used to distinguish their products
·         Must be a consistent portrayal of a mark to protect it (Rock and Roll Hall of Fame)
B. Distinctiveness:
·         1. Spectrum of Distinctiveness: (Abercrombie)
o    i. Inherently Distinctive
§  Arbitrary
·         When common words are used in unfamiliar way; no relation to the product (ex. Yahoo)
§  Fanciful
·         Words invented solely for the purpose of the trademark; no common/dictionary meaning
§  Suggestive
·         Suggest, rather than describe, certain qualities of the goods
·         Requires imagination to reach the conclusion of the nature of the mark
·         When thinking about it, look more to whether or not it’s descriptive; if not, then it’s suggestive
·         Imagination Test: Is imagination required to reach a conclusion about the nature of the product
·         Competitors’ Needs Test: Looks at competitor’s needs for the mark to ID their goods. Great need = descriptive
o    Evidence of suggestiveness can be alt names (such as alts thought of by the defendant during development)
o    ii. Non-Distinctive Marks
§  Descriptive
·         describes the ingredients, qualities, or characteristics of the product
·         can only gain distinctiveness by secondary meaning
§  Generic
·         The generic name for a product may not be trademarked
·         Cannot be a TM ever, not even w/ secondary meaning
·         If the public begins to use a mark as a synonym for the product itself rather than as an indication of the products source, genericide
o    If a protected trademark becomes generic, it will lose its protected status (common law and registered)
·         a term may be generic in one market but not in another
o    iii. Trade Dress: Product Design vs. Product Packaging
§  Product design cannot be inherently distinctive; requires secondary meaning (Walmart)
·         Color is product design; requires secondary meaning (Qualitex)
§  Product Packaging can be inherently distinctive (primary purpose is marketing)
§  Ambiguous trade dress should be construed as product design (Slokevage)
o    iv. Rules when Determining Distinctiveness
§  Misspelled marks that sound the same as the properly spelled version are treated as if they were spelled right (Lite = Light)
§  The distinctiveness of a mark is determined by looking at the mark as a whole, rather than by considering the distinctiveness of e

to establish trademark rights in US
§  Famous Marks Exception: Famous marks that commenced use in foreign countries prior to a use in the US have priority of use in a market where the mark is sufficiently well known to relevant US consumers
·         Factors for Fame of a Mark:
o    1) evidence the D intentionally associated with the foreign mark
o    2) direct evidence (surveys, etc.) that consumers of D’s goods believe them to be associated with P
o    3) Evidence of actual overlap b/t customers
o    iv. Analogous Use
§  An opposer to a trademark registration may rely on use insufficient to establish actual use for registration purposes to challenge a trademark registration
§  Use sufficient to create secondary meaning… association in the eyes of the public but not enough to constitute actual use is sufficient for analogous use
§  Ex. advertising a mark not yet used in commerce prior to the registrant’s use
o    v. Concurrent Use
§  Lanham Act
·         Limited Territory Defense
o    A remote user has the right to use an otherwise infringing mark in a remote geographical area if that use is in good faith prior to senior registrant’s registration
o    1) was in good faith
o    2) prior to the senior registrant’s registration; and
·         Concurrent Use w/ Registrations (Dawn Donut)
o    In registration, can file a concurrent use registration in order to continue using a mark that is similar to another previously registered mark but is unlikely to cause confusion among consumers
§  1) Mark was adopted in good faith (no intent to confuse w/ the other mark)
§  2) No LoC
§  3) Senior registrant may at any time enjoin the junior user if senior registrant shows intent to expand into the junior user’s market
o    Usually an issue if product lines expand over time and come into contact (ex. apple computers and apple music label when iTunes came out)
§  Common Law
·         You own a mark in the market in which you use it in good faith. No right to prevent others from using the mark in an unused territory; permits concurrent use in non-conflicting territories
o    vi. Constructive Use Date
§  Use Application: registration constitutes constructive use of a mark throughout US, giving registrant retroactive priority on date of application
§  ITU Application: If an ITU application ripens into a valid trademark registration, the priority date is the date of application
·         3. Priority to Oppose Registration or Use
o    i. First Use
§  Between competing users of a mark, priority belongs to the first user (senior user) of the mark in a market, whether that be actual use (common law trademark) or constructive use (registration date with PTO)
o    ii. Tacking
§  If a similar mark to the one attempting registration was used before, the new user may establish priority based on the first user; marks must be sufficiently similar
o    iii. Priority and ITU Applications
§  Mark owner with pending ITU application cannot be enjoined from using his mark to gain full registration if the holder of a similar mark commenced use of its mark after the filing of the ITU application
·         4. Joint Endeavor Test
o    In the case of a joint venture where parties involved in the venture dispute ownership of the mark, the ownership is determined by a 2 part test:
§  1) Identify the goods/characteristics of a good/service known by the public
§  2) The TM belongs to the person who controls that good/characteristic