Service marks

In Trademarks 101 (Part 1 of this series), trademarks, service marks and the registration process briefly explained.  In this installment, trademark limitations, infringement and importance of registration are explored.

Common Instances Where A Company Cannot Acquire Trademark Protection

• Abandonment.  Abandonment is a situation in which the owner of a mark does not use the mark for a significant period of time, fails to protect the unauthorized use or lets others use the mark without adequate supervision.  If a mark is abandoned, the owner might lose its exclusive rights to the mark. For example, if the owner of a mark for an apartment closed its business and failed to use the mark for twenty years the owner would have abandoned the mark.
• Generic Terms.  Generic terms are common words or terms which the relevant purchasing public identify products and services and are not specific to any particular source. For example, the term “cola” is a generic term.
• Likelihood of Confusion.  The terms “likelihood of confusion” or “confusingly similar” refer to the foundation of trademark law.  It is the standard required to prove infringement of a trademark.  The likelihood of confusion test is also one of several examinations conducted by the USPTO in determining whether or not to approve an applicant’s trademark application.  Intent to infringe is not necessary as an innocent infringement is just as damaging to a trademark owner as an intentional one.  Although the defendant’s intent to infringe may play a role in assessing damages, there is no requirement that defendant have intended to infringe another’s mark.
• Descriptive Trademark.  A descriptive trademark is a mark that is descriptive or suggestive of the product or service and entitled to a lesser degree of protection than a stronger mark (i.e., one that is arbitrary or fanciful).  A descriptive trademark will not be protected unless the owner of the mark can prove that consumers are aware that the mark is associated with their product or service.  If an applicant attempts to register a weak mark, the USPTO will not approve a mark unless the applicant proves distinctiveness.
• Functional Design.  Trade Dress is the totality of elements in which a product or service is shaped or packaged, such as the shape and appearance of a product or container.  Trademark law will not protect functional aspects of a product or packaging.  For example, an electric guitar body can be made with various designs.  The guitar designs may be trademarked because the guitar’s design is not required for it to function properly.  The design may be also protected as a design patent.

Trademark Infringement

Infringement may occur when a mark is identical or confusingly similar to a trademark of its owner.  Once it is determined that another mark may be confusingly similar, a trademark owner should take aggressive action.  Failure to take steps to protect a mark can be held to constitute a waiver of any rights in the mark.  If a mark is federally registered, the registrant may initiate a civil action in federal court against anybody who used the mark without the registrant’s consent in a manner likely to cause confusion.

If the mark is infringing, the registered mark’s owner may be able to recover the infringer’s profits, the mark owner’s damages, treble damages, costs and attorney’s fees.  On the contrary, if the trademark’s owner has not been damaged, the court has discretion to allow the competitor to use the mark under very limited circumstances in order to avoid the possibility of consumer confusion.

Importance Of Trademark Registration

Registration of a trademark with the USPTO gives constructive notice nationally that trademark belongs exclusively to the registrant.  The registrant is also allowed to use the symbol ® to indicate that the trademark has been registered.  Once a mark is registered with the USPTO, an infringement action can be initiated in federal court, a variety of remedies can be granted, including damages.  A mark owner does not need to have federally registered a trademark with the USPTO to initiate a lawsuit for competing use of the infringing mark, but would rely on unfair competition laws.  Moreover, the unregistered mark owner’s right of enforcement may also be geographically limited to one or more states, rather than nationwide had the mark been registered with the USPTO.  Most states also provide for some means registering trademarks with a state agency and allow for some remedies in case of infringement.

What Is A Trademark?

A trademark is a “word, name, symbol, device, or combination” of these that an entity uses to identify and distinguish its goods from those of others. A service mark is similarly defined, but is used to distinguish services. The term “mark” includes both trademarks and service marks. Titles, character names, or other distinctive features of movies, television, and radio programs can also serve as marks when used to promote a product or service. Once a mark is established, the owner is entitled to its exclusive use. For example, the name “Chanel” and the overlapping double “C” symbol have value because people associate them with Chanel®’s products and all of the luxury and quality and trust that the company has built over the years.

Trademark Registration.

To register and obtain benefits of registration under federal trademark law, an applicant files an application with the U.S. Patent & Trademark Office (“USPTO”).  A mark can be registered if it is currently used in commerce.  An applicant can also file an intent to use application if the applicant intends to put mark into practice within six months, although subsequent extensions are available and registration is required.  A registration is effective for ten years and renewable every ten years.  After the initial registration, however, the mark’s owner must file an affidavit demonstrating continuous use in commerce between fifth and sixth years after the initial registration.  World-wide trademark registration and management is complicated because trademark rights are solely territorial in scope.  Each country has its own laws and registration systems.  Some countries, for example, grant trademark rights based on a first to use in commerce basis and other countries on a first to file basis.  Generally, to obtain global trademark protection, the rights have to be acquired individually on a country by country basis, although treaties, such as the Madrid Protocol, provide a means to coordinate registrations.

Trademark Law.

Trademark law gives the most protection to distinctive names, logos, and other marketing devices. In decreasing order of distinctiveness are marks that are:  (1) arbitrary and fanciful; (2) suggestive; (3) descriptive; and (4) generic.  Arbitrary marks can be commonly used words that have no relationship to the goods or services they are associated with.  Fanciful marks are typically made-up names.  Suggestive marks suggest a good or service without actually describing them.  Descriptive marks describe a product or service, such as the purpose, quality or geographic origin.  Generic marks merely describe the type of product or service.  Distinctive marks include arbitrary, fanciful and suggestive marks, which are registerable with the USPTO without demonstrating that the mark has acquired a “secondary meaning” in the market.  Descriptive marks, however, may only be registered if a “secondary meaning” has developed through sales and advertising and can be demonstrated by the applicant’s substantially exclusive and continuous use for five years.  Competing uses of marks are generally resolved in favor of the owner to first to use the mark in a category or within a geographic area.  The test used to determine whether one company’s mark infringes that of another is whether the use is likely to cause confusion, mistake, or deception among the relevant consuming public.  In the test, actual confusion is not necessary.  It is likelihood of confusion that is measured.  In Trademarks 102 (Part 2 of this series), trademark limitations, infringement and importance of registration will be explored.