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Intellectual Property
University of North Carolina School of Law
Conley, John M.

IP LAW OUTLINE

Fall 2010- Conley

I. INTRODUCTION

A. The Constitution- Article I Section 8 – the powers of congress . . .To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

B. Species of IP Law

1. Trademark

2. Patent

3. Copyright

4. Trade Secret

5. Unfair Competition

6. Law of Ideas (CA; toys and movie scripts)

7. Right of Publicity (protects images and personas)

II. Trademark

A. What is a trademark?

§ Distinctive marks used in commerce (includes unfair competition and right of publicity)

o Trademarks are generally words, phrases, logos and symbols used by producers to identify their goods. However, shapes, sounds, fragrances and colors may also be registered as trademarks

§ Federal and state statutory and common law coexist (no preemption)

§ Two requirements for TM protection:

o 1. The mark must be in use in commerce (or intent to use) and

o 2. The mark must be distinctive

B. Acquiring a TM

§ Trademarks can be protected either by use or registration

§ The Lanham Act provides for federal registration

§ Intent to use registration reserves it for 6 months (really 24 months with extensions)

§

C. Continuum of Distinctiveness

§

The Less Descriptive the Stronger the Mark!

Generic- soap

§ Unregisterable/ unprotectable

§ Can be denied for being too generic or can become generic over time

§ Descriptive- 100% pure soap

§ Requires proof of secondary meaning

§ Typically done thru surveys

§ Suggestive- Ivory soap

§ Requires some leap of imagination

§ Inherently distinctive

§ Fanciful/ Arbitrary- Camay soap

§ Dissociation b/t the name and the characteristics

§ Inherently distinctive

D. TM Infringement

§ Straight Infringement- unauthorized use of “any reproduction, counterfeit, copy or colorable imitation of a registered mark . . . [which] is likely to cause confusion, or to cause mistake, or to deceive” (Lanham Act Definition)

o Remedies:

§ Usual: Injunction

§ Rare: damages (plaintiff’s losses/defendant’s profits)

§ Rarer still: multiple damages and attorney’s fees

§ Unfair Competition- codified as Lanham Act 43(a)- “…uses in commerce any word, term, name, symbol, or device … or any false designation of origin … or false or misleading statement of fact which: (A) is likely to cause confusion … as to the affiliation with … or as to the origin, sponsorship, or approval … by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origins….”

o Lanham Act is designed to protect consumers but it is enforced by competitors

o Protects trade dress and other non-functional aspects

§ Passing off/ palming off- common law tort which involves misrepresentation and “free-riding” (benefitting from the goodwill of a competitor mark)

o Example: passing off generic cola as coke at restaurant (the restaurant will make a profit by buying cheaper cola and leading others to believe they are serving regular cola)

o Reverse passing off- the customer asks for generic cola and the server gives regular coke- then the consumer may be led to believe that the generic tastes just like coke and is likely to buy it in the future

o Color and Shape- 
The first case to address the issue of product configuration in the pharma arena was the Supreme Court’s 1924 decision in William R. Warner Co. v. Eli Lilly & Co. The case addressed the manufacturer’s efforts to obtain exclusive trademark protection in the chocolate flavor and brown color of its product. Although the evidence demonstrated that the chocolate additives provided a distinctive flavor and color, it also showed that they acted as a suspension medium deemed to enhance the drug’s efficacy. Accordingly, the additives were held to be functional and thereby incapable of protection.

E. Proving Infringement (from CareFirst case in slides)

1. The strength or distinctiveness of the plaintiff’s mark as actually used in the marketplace;

2. The similarity of the two marks to consumers;

3. The similarity of the goods or services that the marks identify;

4. The similarity of the facilities used by the mark holders;

5. The similarity of advertising used by the mark holders;

6. The defendant’s intent; and

7. Actual Confusion

F. Requirements for Protection

1. Use and Use in Commerce- bona fide intention to use the mark made necessary by the 1988 Revision Act which brought ITU. A person could seek registration of a mark not already in commercial use by alleging a bona fide intent to use it and uses it commercially within 6 months.

a. Special Case: Metatags- can a use a consumer does not see bee a use in commerce?

1. US- the courts are divided- the majority view is that a search term transaction is a use in commerce because it effects a consumer’s use

2. Europe- not a use in commerce

b. Common Law

1. Blue Bell v. Farrah Mfg. Co. (1975)- two manufacturers of men’s clothing created the same trademark for clothing that looked alike- the “time out” mark.

o Use “safe harbor”- for sale in the “ultimate retail chain”- moot after 1988 revision to the Lanham Act

c. 15 USCA §1127- “use in commerce” (93) means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. A mark shall be deemed to be used in commerce when (A) put where customers can get them with price/labels and (B) the goods are sold or transported in commerce.

d. Intent to Use

1. Warner Vision – intent to use for “RealWheels,” A registers ITU, B uses, A uses. Can B enjoin A cause they used first? No, as long as A uses within the 6 months there date relates back to the date they filed the ITU.

2. § 1051(b) – 48- bona fide intention may request registration

3. 1051(c)- you can amend

4. 1051(d) – Extension of ITU- up to 24 months under § 1051(d)(2) upon written request before expiration of the initial 6 month period

5. 1052 (d)- 51- you cannot register a mark that is already in use

6. 1057(c)- 54- the filing of the application will give constructive use as of the date the application as long as you subsequently use

2. Distinctiveness and Other Statutory Standards (15A USCA § 1052)

a.

The more users of a term, the more its protection in a given case would be commercially disruptive and unfair to competitors!

Security Center v. First National Security Centers- The court looked into actual and likely use of the mark in order to determine whether its protection interfered with competition among providers of the same product or service. The court reasoned that the more users there were of a term, the more its protection in a given case would be commercially disruptive and unfair to competitors. The court held that trade name was merely descriptive and not suggestive and thus was not inherently protectable. Further, the name had not gained protection by the acquisition of secondary meaning. The court found appellee failed to prove imaginativeness or likelihood of confusion and as a result, dismissed the suit.

o 1st issue: How imaginative is mar

ate a lot more apparent similarity if the marks

6. Factors for judging likelihood of confusion in non-specialized market:

1. Similarity of mark

2. Strength of mark v. other mark

3. Market overlap

4. The nature of the consumer market

e. Merely Descriptive

1. Application of Sun Oil Co.- refusal of “CUSTOM BLENDED” trademark for gasoline on the grounds that it was merely descriptive. Sunuco tried to argue it had acquired secondary meaning but failed.

o The court rejected the surveys in this case- not asking the right question.

1. The Q: What do you know about Sunoco gas?

2. They should have asked a questioned that showed they associated CUSTOM BLENDED with Sunoco

o This is one of the marks that is too descriptive anyway (hopeless)- a vague middle ground b/t descriptive and generic (Judge Rich’s concurrence)

1. Judge Rich suggests a new category on the continuum (really, really descriptive) that would fall below the “hopeless line”

2. The majority seems to think it can be above the “hopeless line” but there is going to be a really high burden on the plaintiff (perfect surveys)

3. Rights

1. 1057 (b) a certificate of registration is prima facie evidence

o exhibit 1

2. 1057 (c)- constructive use of the mark nationwide as of the date of registration

3. 1072- registration of the mark is constructive notice of the owner’s ownership of the mark

4. 1065- incontestability- 61- if you go 5 years w/o a final administrative or court decision adverse to your rights your rights become almost incontestable (validity if you 5 years go by and then you file an affidavit within a year)

5. 1115- Incontestability defenses/ Infringement Defenses

o certificate is prima facie evidence

o if it has become incontestable under 1065, the certificate shall become conclusive

o An inconstestable mark is subject to the following defenses

1. Obtained fraudualently

2. The mark has been abandoned (nonuse and naked licensing)

3. The registered mark misrep source of services

6. 1114- basic infringement provision

o straight or ordinary infringement (different from 43(a) which includes false advertising and unfair competition)

o . . . where such use is likely to cause confusion (same standard as denial of registration)

o Dawn Donut v. Hart’s Food Stores- hart food stores is arguing that the remedy should not be absolute – they argue the right is to be protected against a similar mark that is likely to cause confusion only where it causes confusion.

1. Geographic perimeter for now! The most the court can do is give Hart a right to do business today in his geographic area as long as Dawn does not invade the market.

2. Note: There is a disjunction in this case b/t constructive use/notice and standard for infringement (exception that proves the rule- Hart came after Dawn)

3. Zone of expansion- used to establish the territorial rights of the parties – look at what plaintiff is doing- what are they likely to do tomorrow?