An Overview of Intellectual Property Concepts and Issues - Part II: Trademarks

Intellectual Property is a universal term consisting of four general areas: patents, trademarks, copyrights, and trade secrets.We have written a four part series of articles as an overview of these intellectual property concepts. In part one of this four part series, we discussed different types of and issues surrounding patents.In this article, we explore a second type of intellectual property protection – trademarks.


A trademark can include any word, name, symbol, or device used or intended to be used by a person in commerce to identify and distinguish his or her goods from those manufactured or sold by others, and which a person applies to register on the federal register. A trademark can consist of a name, a design, a product shape, a number, or a slogan. The crucial requirement to function as a trademark is the ability of the chosen mark to distinguish it’s products from other products in the marketplace.

A mark must be distinctive to be recognized as a trademark. Distinctiveness is the inherent capability of the mark to identify the goods sold under a mark as emanating from a particular source. In determining whether a mark is distinctive, courts classify trademarks into one of the following four categories based on the relationship between the mark and the underlying product: generic, descriptive, suggestive, and arbitrary or fanciful.

A generic mark states a basic nature of a product or service. These are terms which would be used by all manufacturers of the same type of goods to describe their products, such as ASPIRIN, MILK, DAIRY, and BREAD. Because these terms would need to be used by all manufacturers, they can never serve to distinguish one manufacturer from another. Since they are considered to have no distinctiveness, generic marks can never be registered

A descriptive mark merely describes the services or goods on which the mark is used, such as SECURITY CENTER (for a secure storage facility). Descriptive marks allow one to reach that conclusion without any imagination, thought or perception. No trademark rights are granted to merely descriptive marks. Although merely descriptive marks may be registered federally on the Supplemental Register which allows you to use an ® by the trademark, we nevertheless strongly advise to avoid adoption and use of merely descriptive marks because they are unenforceable. However, it is possible for descriptive marks to "become distinctive" by achieving secondary meaning. Secondary meaning indicates that although the mark is on its face descriptive of the goods or services, consumers recognize the mark as having a source indicating function. Once it can be shown that a descriptive mark or phrase has achieved this "second meaning" and is not "merely" descriptive, a protectable trademark is developed. When trying to determine whether a given mark has acquired secondary meaning, courts will often look to the following factors: (1) the amount and manner of advertising; (2) the volume of sales; (3) the length and manner of the mark's use; and (4) results of consumer surveys.

A suggestive mark suggests a quality or characteristic of the goods and services. Suggestive marks require some imagination, thought, or perception to reach a conclusion as to the nature of the goods. They are not as strong as fanciful or arbitrary marks but are far more common due to the inherent marketing advantage of tying a mark to the product in a customer's mind. In addition, suggestive marks are fully enforceable and can be registered on the U.S. PTO Principal Register.

Arbitrary or fanciful marks bear no logical relationship to the underlying product and are considered "inherently distinctive." They are words which have been invented for the sole purpose of functioning as a trademark and have no meaning other than acting as a mark. Fanciful marks are considered to be the strongest type of mark.

Trademark rights are grounded in use. They are acquired only by being the first to properly use the term as a trademark in commerce or by filing a federal intent-to-use trademark application that matures into a registration. Use means placing the mark before the public, generally through a bona fide sale of the marked good or service with intent to continue in the future. Intra-company sales, sales to personal friends and relatives, and incorporating the name within a state are all insufficient public uses to establish a trademark. There is no set formula as to the quantity of use required to establish trademark rights, but the general rule is that trademark rights are not created by sporadic, de minimis use. Since the Trademark Revision Act of 1988, token uses of the mark no longer qualify as establishing a trademark.

A federal registration is not necessary to establish trademark rights, but it does provide the trademark owner with certain benefits that non-registered mark owners do not have. Federally registered trademark owners are presumed to be the owner of the trademark on the specified goods and services listed on the registration, and they are, therefore, entitled to exclusive use of the mark throughout the United States. Federal registration is prima facie evidence of ownership of the mark and serves as constructive notice throughout the United States. Federal registration gives the owner of the mark jurisdiction in U.S. federal courts and additional remedies in the event that a dispute arises regarding the federally registered mark. Trademarks that are not federally registered will typically have rights only in their limited areas of use, and absent statutory requirements the owner of the trademark may not avail themselves to the federal courts. Registered trademark owners tend to have a greater advantage in court proceedings than trademark owners without any federal registrations. The federal registration shows greater legitimacy in the rights of the trademark owner. Federal trademarks can also obtain Section 15 incontestability rights after five years of registration which significantly increases the strength of the trademark and reduces the number of defenses an infringer has to attack or weaken a federally registered trademark.

Infringement of trademark rights can take many forms. First, a court can determine whether there is a likelihood of confusion (as to source of origin, affiliation, sponsorship or connection) on the part of the consumers between the marks used by the two contesting parties. Likelihood does not mean a mere possibility of confusion, but rather a probability that confusion will occur. Among the factors to consider in determining likelihood of confusion are the strength of the mark, the similarity between the marks, the junior user’s good faith in adopting the mark, evidence of actual confusion, and the sophistication of the consumers.

Trademarks can also be infringed through reverse confusion. Reverse confusion occurs where the junior user’sadvertising so greatly overshadows that of the senior user that consumers come to the mistaken conclusion that the junior user is in fact the source of senior user’s goods. The result is that the senior user loses the value of the trademark and control over its goodwill and reputation. The same general standards applied to determine traditional likelihood of confusion are also applied to reverse confusion.

A third type of trademark infringement is a counterfeit mark. A counterfeit mark is a spurious mark which is identical with, or substantially indistinguishable from, a registered mark. Likelihood of confusion, intentional trafficking or attempted trafficking, and knowing use of the counterfeit mark are all required to find trademark counterfeiting.

The final type of trademark infringement, contributory infringement, occurs when a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement.

Many defenses are effective against trademark infringement claims. The trademark could be abandoned, where the trademark owner forfeits the trademark rights and the mark is free for use by the next adopter of the mark (ceasing use of the mark plus an intent not to use the mark in the future is required to prove abandonment). A defense of acquiescence asserts express or implied consent by the trademark owner to the alleged infringer’s use of the mark. An alleged infringer could assert a defense that the trademark owner unreasonably delayed in asserting his rights against the alleged infringer, and the infringer relied on the trademark owner’s delay to his prejudice. Genericness is found if the mark names the class of goods to which it is applied. The test to determine whether a term is generic is its primary significance to the relevant public. Finally, fair use, where the alleged infringer’s use is solely to describe the alleged infringer’s goods, is also an established defense.

Comparative advertising does not necessarily violate trademark rights, but is actionable if the claim is false or misleading to consumers. In such a case, the alleger has the burden of establishing that the advertising was significantly and materially false and likely to influence a reasonable consumer’s purchasing decision.A mere comparison of a product’s efficacy or price is not false or misleading to consumers if the products produce similar or comparable effects and if the claim about differences in product prices is truthful. The Federal Trade Commission (FTC) and the Federal Food and Drug Administration (FDA) regulate the enforcement of comparative advertising and do not require any specific or particular type of substantiation to support comparative advertisements. The FTC and FDA only look to a basic standard of truthful and non-misleading advertising when scrutinizing comparative claims.

Trademark infringement claims can also arise out of use or registration of an Internet domain name. The ICANN Uniform Dispute Resolution Policy sets the legal standards and framework for the resolution of the disputes between a domain name registrant and a trademark owner over alleged “bad faith” registration and use of an Internet Domain Name. The policy provides a cost effective and expedited dispute resolution process. Available forums under the policy are the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center, the National Arbitration Federation, and the eResolution Consortium. Typically a trademark owner can file a ICANN-affiliated complaint by alleging the following elements: the domain name registered is identical or confusingly similar to a trademark or service mark in which the complainant has rights, the domain name registrant has no rights or legitimate interests in respect to the domain name in question, and the domain name has been registered and is being used in bad faith. A successful claim under the ICANN Uniform Dispute Resolution Policy can result in the transfer of a domain name, but not an award of monetary damages.

The Anti-Cybersquatting Consumer Protection Act (“ACPA”) provides a federal cause of action for a trademark infringement complaint involving a domain name. Under the ACPA the plaintiff has an option to seek traditional remedies under the Trademark Act or elect an award of statutory damages of $1,000 to $100,000 per domain name, the amount of which is discretionary to the judge. The judge will most often also order transfer or forfeiture of the domain name.

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