Principles of Trademark Law

1. Trademark: any indication of origin (smell, sound, words, logos, etc.) a. Latham Act Definition: Any word, name, symbol, or device, or any combination thereof (1) used by a person or (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act to identify and distinguish his/her goods from those manufactured or sold by others and to indicate the source of the goods. 2. 2 Goals of Trademark Law a. Protect rights of trademark owner (Private Interest). The trademark owner spent time and money to build strength of the good will of the trademark. b. Protect the public (Public Interest). Protects the consumers from being confused. i. The public interest against deception is necessarily a fundamental consideration in unfair competition cases. Trademark rights are more appropriately viewed as a benefit to consumers, reducing consumer search costs and giving firms the incentive to maintain consistent product quality so as to make the investment of resources in developing and maintaining a strong trade identity worthwhile. 3. Trademarks are a type of unfair competition. Why is it unfair? You are casting your products as someone elses. There are other types of unfair competition that are not trademarks. Examples: General misrepresentation, deceptive advertising 4. Monopoly: Used occasionally as a defense in trademark litigation. You cant own a word! Trademark rights, however, is only a qualified right to exclude, extending only to the limits of likelihood of confusion or deception. 5. Federal Trademark Law a. Latham Act: In order to have protection for your trademark you MUST use it in commerce. If you have one, but do not use it for a while, it loses protection (abandonment). b. Revision Act (1989): You can file an application for Intent to Use. You do not get the right of protection until you actually use it though. Courts will use the date of filing (of the intent to use) for priority purposes. c. The federal government has control over trademarks through the commerce clause.

Infringement Generally
1. You must posses a protectable mark a. Priority (first in use)? b. Distinctiveness c. Registered? (incontestability after 5 years) 2. Opposing party has used your mark, and it causes a likelihood of confusion a. Likelihood of confusion See Polaroid Factors 3. Does the defendant have any defenses? a. Loss of rights/Abandonment b. Laches c. Acquiescence d. Bad Faith

Protectable Mark: Priority

1. Who has priority? First to use in commerce. a. Use in Commerce: Bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. In order to support trademark rights, a partys use has to constitute a commercial market reality, must be clearly perceived by the relevant group of consumers in connection with the goods and service offered in connection with the mark, and must not be in the nature of token use or de minimis use. b. Courts generally find trademark use on goods only where goods are sold with the trademark clearly affixed thereto, or the mark is displayed in close proximity to the goods, packages or containers so that purchasers can see it. c. It is possible through advertising and promotion to associate a particular mark with a particular product in the public mind before any actual sale takes place. Another company could enter the market and take advantage of the advertising and marketing that company #1 spent money on.

2. Sufficient Use. Courts use the totality of the circumstances test to determine whether a company has established their rights. a. Ex: In T.A.B. Systems v. Pac-Tel, the Court found that the mailing of 35,000 postcards that generated 128 responses and no sales was insufficient to establish rights under the totality of the circumstances test. b. Ex: In Mystique, the court said, to warrant protection, use of a mark need not have gained wide public recognition, but secret, undisclosed internal shipments are generally inadequate. c. Ex: In Carmax, the court observed that Carmax failed to use the mark in basic commercial contexts such as their telephone listings, store signs, newspaper ads and other customer information, and there was no evidence of public awareness of the marks association with defendants business. d. See Zazu Designs v. LOreal, S.A.: Cosmair developed a hair cosmetics line called Zazu. When developing the product, Cosmair (LOreal) hired someone to see if the name was trademarked. Zazu Hair Design (a hair salon) had the name registered in IL. LOreal was told that the salon was not currently developing or selling products to sell of their own with the name Zazu. Months after LOreal inquired, the salon developed products and filled the order. The salon sued LOreal for trademark infringement. Holding: LOreal was not enjoined from using the name. Reasoning: The salons sales of its products were insufficient use to establish priority over LOreal. Intent to use a mark establishes no rights at all if not registered (Now, you can fill out an intent to use application). The salon made first use of hair services, but that does not translate to a protectable right to market hair products nationally. Because the mark was not registered for use in conjunction with hair products, any knowledge LOreal may have had of the salons plans is irrelevant. A potential user should not have to bide its time until it learns whether other firms are serious about marketing a product. 3. Intent to Use and Priority. a. Warnervision Entertainment v. Empire of Carolina: i. Issue: What happens if you have company #1 file an intent to use application and then the company #2 starts to use, then company #1 actually uses it after #2 does. ii. Does party 2 have the rights since they are the first to use it? No. Priority is given to company 1. If you are the first to file an ITU, and you then use it, you have priority. For priority purposes, the court will look at the date the ITU application was filed. 4. Is a party attempting to be granted concurrent use? a. Concurrent Use: 2 innocent parties in different territories; neither party is intentionally infringing. Source confusion must remain unlikely. Courts are reluctant to deprive the junior user of goodwill that they might have been building for years; Court will try to find someway to let both parties continue to use the mark. b. Who gets what territory? Look at these factors (Weiner King factors): (1) Previous business activity, (2) Previous expansion or lack thereof, (3) Dominance of contiguous areas, (4) Presently planned expansion, (5) Possible market penetration by means of products brought in form other areas. c. See United Drug Co. v. Theodore Rectanus, Co. NOTE: before the Latham Act. Plaintiff was using Rex in Massachusettes, Defendant was using Rex in Kentucky. There is nothing to show that any customer in Kentucky have ever heard of the MassRex before MassRex shipped there. Holding: Plaintiff should have expanded more quickly; Plaintiff was taking a risk that another party would start using the mark somewhere else. (This would not be the case today) d. See Dawn Donut Co. v. Harts Food Stores, Inc. Dawn Donut Mix v. Dawn Bakery. Injunction denied. Defendant had constructive notice of the mark when they registered the mark. Latham Act gives nationwide protection regardless if the registration is just based on use in a certain territory. (see territory restrictions - antitrust). Court was straining to find out a way for both parties to win. Defendant did not have to stop using it. If plaintiff were to expand into s territory, the Court would reconsider it. e. See Weiner King, Inc. v. Weiner King Corp. Weiner King (Co.) v. Weiner King (WKNC). Injunction denied. WKNC was the first to register its mark under the Latham

Act. WKNC underwent a large portion of its expansion after notice of the existence of Weiner King and its use of the WEINER KING mark in the Flemington, NJ area. WKNC did not palm off or trade on the reputation of WK. Instead, they sought to gain from their own goodwill. WKNC expanded out of the North Carolina with notice of the WKs existence and use of its Weiner King mark. This reason is legally insufficient to support a finding of bad faith. (The mere knowledge of the prior user should, by itself, constitute bad faith)

Protectable Mark: Distinctiveness

Highest Protection------------------------------------------------------------------------------------------> None Fanciful Mark Arbitrary Mark Suggestive Mark Descriptive Mark Generic Mark A coined word in that it is invented for the sole purpose of functioning as a trademark. Ex: Spotify, Skype Given the highest level of protection. A word exists and has a meaning, but is arbitrary for the meaning of the product. Ex: GAP, grey goose Given a high level of protection Mark doesnt tell you what it is, but it conjures up some impression that the word is related to the product Ex: Coppertone, ivory soap No secondary meaning need be shown because it is not perceived by the public according to its ordinary meaning Mark describes the product, or some quality or feature of the product Mark is telling you what the product is

Ex: Beer nuts Cannot be marks unless used so extensively that they developed a secondary meaning.

Ex: Milk, chair Never protectable.

1. Is it a Distinctive/Descriptive Term? a. One obtains rights to a mark when: (1) the mark is inherently distinctive; or, if it is not, (2) if the mark attains a secondary meaning. i. Is the mark inherently distinctive? ii. Or, has the mark gained secondary meaning? 1. Factors the court looked at for secondary meaning: (1) length and manner of its use; (2) nature and extent of advertising and promotion; (3) efforts made by the plaintiff to promote a conscious connection in the publics mind between the name and the plaintiffs business; (4) extent to which the public actually identifies the name with the plaintiffs service. (Investacorp v. Investorcorp) 2. In determining secondary meaning, the chief inquiry is directed towards purchasers attitudes toward a mark. (Union Carbide Corp. v. EVEREADY) b. Is the mark deceptively misdescriptive? i. See Marilyn Miglin Model Makeup v Jovan, Inc: Court found that the mark was deceptively misdescriptive because the name Pheronome for a fragrance which does not purport to be a pheromone or to contain pheromones. The Court also found that the mark did not establish secondary meaning. c. Is the mark simply laudatory? i. Rule: Marks that are merely laudatory (claiming superiority) and descriptive of the alleged merit of a product are regarded as being descriptive. Those that are highly laudatory are incapable of acquiring distinctiveness. ii. Ex: Couldnt register Americas Best Popcorn because the phrases are only selfawarded laudations of applicants product, which others might be equally entitled to use. iii. See Pabst Blue Ribbon v. Decatur Brewing Co.. Could not prevent from selling packages of ingredients for home brewed beer under the name Blue Ribbon

d.

e.

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because it was a term signifying high merit, which was used at the time over 60 widely varying products, and that it was therefore only entitled to limited protection. Is the mark deceptive? i. Rule: Cannot register a deceptive term because it misleads the public. 1. Deception is found when an essential and material element is misrepresented, is distinctly false, and is the very element upon which the customer reasonably relies in purchasing one product over another. 2. Deceptively misleading marks may be registered and protected, however, because the deception is not material to the purchasers decision. Is the mark a slogan? i. Rule: Even though a word, name, symbol, device, or a combination of words, a slogan may be used in the sale or advertising of services or on or in connection with goods it is not protectable as a trademark unless it is used as a trademark. Is the mark a geographic term? i. Rule: Must show that a secondary meaning was acquired. Not protectable if they are deceptive, or if they are primarily deceptively misdescriptive of the geographical origin of the goods or services 1. Primarily Deceptively Misdescriptive: 2 part test: (1) the marks primary significance is a generally known geographic location; and (2) consumers would reasonably believe the applicants goods are connected with the geographic location in the mark, when in fact they are not, and (3) the misrepresentation was a material factor in the consumer decision. See re les Halles de Paris J.V. ii. See Waltham Watch: Defendant wanted to use Waltham on their watches because they were made in Waltham. Plaintiff said it infringed their trademark, Waltham Watches. Holding: Defendant was required to distinguish his goods in some way. 1. Conflicting interests: (1) it is desirable that the plaintiff should not lose custom by reason of the public mistaking another manufacturer for it. (2) desirable that the should be free to manufacture watches at Watham, and to tell the world that it does so. iii. See Roquefort: There is a certain type of cheese from Roquefort, which is indicated on the packaging of the cheese, which certifies that it comes from the region. There was another company putting Roquefort Cheese on their packaging, but the cheese actually originated from Hungary. Holding: The Court ruled that company #2 could not label the cheese from Hungary as such, because it would confuse or deceive the public. Is the mark a certification mark? i. Certification marks are nonexclusive and are available to anyone who maintains the required standards. (Cannot be registered/owned) ii. Ex: Idaho potatoes, Roquefort Cheese case, Champagne Is the mark a personal name? i. The courts have historically revealed a distaste for unqualifiedly prohibiting the use of one own name in commerce, but when pressed with hard cases, they have generally relied upon the basic test of likelihood of confusion. Usually the court will find some way to let you use it in some sort of capacity. ii. When a name has become strongly connected in the public mind with a certain product, and a latecomer bearing the name attempts to use the name in selling of a competing product, the courts will sometimes allow the latecomer use the name so long as it is accompanied by a prefix, suffix, or disclaimer designed to allow the public to distinguish between sources. iii. Surnames. The Latham Act precludes their registration unless it becomes so distinctive to the goods in commerce. (show secondary meaning for registration) 1. See Waterman: Couldnt prohibit all use of the Waterman name, but must alter it. iv. See Wyatt Earp: Bad faith- defendant said that the outfits were official, using the Wyatt Earp name on childrens playsuits. The defendants use of the name created a likelihood that the public would believe, erroneously, that its playsuits were licensed

or sponsored by the plaintiff, to the injury of the plaintiffs good will and to the hazards of its reputation. v. See Peaceable Planet v. TY, Inc. Naming a toy camel, Niles. Court determined that Peaceable Planet has a valid trademark in the name Niles as applied to its camel. 1. Concerns: (1) reluctance to forbid a person to use his own name in his own business; (2) some names are so common that consumers will not assume that two products having the same name therefore have the same source, and so they will not be confused by their bearing the same name; (3) preventing a person from using his name to denote his business may deprive consumers of useful information. vi. Other General Rules 1. No paramount right to use a surname in a business where it is likely to be confused with a name that has already acquired source-indicating significance (ex: Ford Motors v. Ford Records) 2. Historical Names may be inherently distinctive arbitrary marks, not requiring proof of a secondary meaning (ex: using Robin Hood is OK no one will think its connected to Robin Hood)

Protectable Mark: Is Trade Dress Protectable?

1. Is the mark trade dress? (visual but non-verbal marks) a. Two types of trade dress: (1) of packaging; (2) of product itself. 2. Is the mark capable of being distinctive? a. Two Types: (1) inherent distinctiveness, (2) acquired distinctiveness (through secondary meaning) b. Does the mark have inherent distinctiveness? (if yes- protectable) OR c. Has the mark have acquired distinctiveness through secondary meaning? (If yesprotectable) i. Secondary meaning: (1) length and manner of use; (2) nature and extent of advertising and promotion; (3) volume of sales; (4) the efforts made to promote a conscious connection in the publics mind between the trade dress and the product; (5) extent to which the public actually identifies the trade dress with plaintiffs product. The unusualness of the design and the extent that it has been advertised and promoted can play particularly significant roles in determining whether secondary meaning exists. ii. See Two Pesos, Inc. v. Taco Cabana, Inc. dealing with trade dress. 1. Facts: Claimed trade dress protection for their Mexican restaurant dcor. 2. Holding: The restaurant was trade dress; it was inherently distinctive and can be protected. Only non-functional, distinctive trade dress will be protected. Inherently distinctive trade dress does not need to show secondary meaning. iii. See Wal-Mart Stores v. Samara dealing with product configuration (design) 1. Facts: Walmart copied sixteen of Samara's garments with some small modifications to produce line of clothes. Samara brought an action for infringement of unregistered trade dress under the Latham Act. 2. Holding: A products design is distinctive and therefore protectable, only upon a showing of secondary meaning. Product design (but not packaging) can never be inherently distinctive. iv. Is the mark a historical design? 1. Where a plaintiff intentionally copies a historical design, and subsequently claims infringement of its alleged trade dress rights in that design, it may be difficult for the plaintiff to establish secondary meaning. Ex: mission furniture d. HOWEVER, is the mark functional? (If yes then no protection) i. Functionality Test (See In re Morton Products) 1. Are therealternative designs? (Is the feature ornamental or arbitrary?) 2. Is there a big difference inexpense between the debated design and alternatives? (other options cannot be overly expensive) 3. How has the mark beenadvertised? (does it advertise its functionality?) 4. Does it have autility patent? (usually a kiss of death shows it is functional)

ii. See In Re Morton-Norwich Products, Inc 1. Facts: Appellants application seeks to register a container configuration as a trademark for spray starch, soil. And stain removers, spray cleaners for household use, liquid household cleaners, and general grease removers, and insecticides. Can the design of a spray bottle be trademarked? 2. Holding: The shape of the bottle is not purely functional and therefore it can be registered as a trademark. Molded plastic bottle can have an infinite variety of forms or designs and still function to hold liquid. No one form is necessary or appears to be superior. iii. See Traffix Devices, Inc. v. Marketing Displays, Inc. 1. Facts: Double spring signs were patented, the patent expired, and a competitor started to manufacture the signs with double springs. What is the effect of an expired patent on a claim of trade dress infringement? 2. Holding: Expired patent is evidence that the sign was functional. Utility patent was strong evidence that the double spring was necessary for function. (Presumed to be functional). This is a rebuttable presumption, and can be overcome. It was not overcome here, however. iv. See Specialized Seating, Inc. v. Greenwhich Industries 1. Facts: Clarin makes x-frame folding chairs. It applied for registration of one particular x-frame design as a trademark. Clarin argues that their mark is incontestable, which means that Clarin does not have to show secondary meaning. 2. Holding: No protection. All of the claimed features are functional; none were added to produce a distinctive appearance that would help consumers identify the products source. v. See Georgia-Pacific Consumer Products v. Kimberly-Clark Corp 1. Facts: Claims a few of Kimberly-Clarks brands of toilet paper are infringing Georgia-Pacifics trademark design (diamonds on Quilted Northern paper) 2. Holding: G-P cannot trademark the design because it is functional. In G-Ps patent applications, G-P said that the central advance is embossing a quiltlike diamond lattice filled with signature designs that improves softness and bulk, and reduces nesting and ridging. This is the same essential feature claimed in the trademarks. This is strong evidence that the design is functional, and therefore not protectable. Even though there may be alternative designs for toilet paper, that is not enough, on its own, render the design nonfunctional and incidental. 3. Is the mark a color? a. Three Questions to ask: i. Is the color an indicator of source? ii. Has the color gained secondary meaning? iii. Is the color functional? (Functional colors will not be protected) b. See Qualitex Co. v. Jacobson Products Co, Inc. i. Facts: Qualitex uses a special shade of green-gold on the pads that it makes and sells to dry cleaning firms for use on dry cleaning presses. Claimed TM infringment for using same color. ii. Holding: Sometimes a color will meet ordinarily legal trademark requirements, and can be protected by trademark law. There is no rule absolutely barring the use. Criteria for trademark protection of color: source distinguishing ability iii. Reasoning: Trademarks can include any word, name, symbol, or device, or any combination thereof. If a shape, a sound, and a fragrance can act as symbols, why cant a color? A color, over time, can come to identify and distinguish goods, such in the way that descriptive words on a product can come to indicate a products origin. The color of the pads, this case, (1) developed a secondary meaning, and (2) was used for no other purpose (no functionality). iv. Defendants arguments:

1. Courts cant determine shades of color, and when it would be infringing or not. However its not a side by side comparison. It is the publics impression of when they see one or the other. 2. Colors are in limited supply. However there are normally alternative colors available. If there are not, there could be a functionality argument (if you can show that other colors really wont work). Examples of functional colors: green farmer equipment

Trademark Infringement
1. Is there a likelihood of confusion? a. Polaroid Factors (2nd Circuit Factors) (followed by most courts) i. Strength of trademark **important** ii. Similarity of trademarks ***most important*** iii. Similarity of products **important** iv. Bridging the gap (is it likely that the plaintiff will move into a product area similar to the defendants?) v. Actual confusion (Are there reports that consumers are actually confused? Surveys are often used as evidence). Not required, but if you can show it, it is very persuasive. vi. Quality of s product ( cant control the quality of the s. If the s quality is shitty, the Court is more apt to give protection to protect your brand) vii. Sophistication of purchasers. (Are the consumers professionals? Etc?) b. Factor 1: Strength of the mark. i. Famous or celebrated marks are sometimes afforded greater protection than those less well-known. ii. Ex: VIRGIN was entitled to a broad scope of protection, precisely because the use of the mark by others in connection with stores seling reasonably closely related merchandise would inevitably have a high liklihood of causing consumer confusion. c. Factor 2: Similarity of the trademark. i. Do the marks have a similar appearance? 1. Similarity of appearance has always been the paramount criterion in determining likelihood of confusion. 2. The mere repositioning or changing of one letter in a well-known trademark commonly will not avoid a likelihood of confusion and a determination of infringement. 3. See Vornado v. Brewer Electrical Mfg, Co. Tornado v. Vornado electrical appliances. Court found confusion likely based upon the striking similarity in sound and appearance of the 2 marks, and affirmed the denial of Vornados registration. ii. Do the marks have a similar sound? 1. Similarity of sound has been accorded less weight by the courts and less attention by the infringers. Two marks, hardly similar in appearance or meaning, may be so similar in sound as to results in a likelihood of confusion, particularly where the products are ordinarily purchased by spoken word. The issue is the pronunciation used by potential purchasers, even if it is incorrect. iii. Do the marks have a similar connotation? 1. See Apple Computer, Inc. v. Formula Intern, Inc. Facts: Formula entered the computer market, selling a computer kit under the trademark Pineapple. The computer was designed to be compatible with application software written for the home computer manufactured by Apple. Apple brought suit claiming trademark infringement and unfair competition. Holding: It is okay to conclude that the use of the name pineapple is confusingly similar to the apple trademark when used on related goods. iv. Are the marks synonymous? 1. See Mobil oil Corp. v. Pegasus Petroleum Corp. Since 1931, Mobil has made extensive use of its well known flying horse symbol-representing Pegasus. It is a very strong mark. Pegasus Petrolem testified that he selected the name because

he wanted a name with both mythical connotations and alliterative qualities. He knew of the flying horse when he picked the name, but claimed that he didnt know that the symbol represented Pegasus or that Mobil used the word pegasus in connection with the petroleum business. Holding: there is a likelihood of confusion, and therefore there is trademark infringement. v. Is the mark a foreign one? 1. A foreign word may create likely confusion with an American trademark if the connotation is similar. Ex: Good Morning soap and Buenos Dias soap. 2. See Morrison Entertainment Group v. Nintendo of America, Inc: Pokemon was held unlikely to be confused with Monster in my Pocket mark, despite po-kaymon being an abbreviation in Japanese for pocket monster. Casual American observers would not know the origin of the word. vi. Are the marks sold in the same marketing environment? 1. Where goods are sold through the same channels of trade or in the same store or specialty shop, likelihood of confusion is enhanced. However, just because two items are sold in a supermarket does not foreclose further inquiry. 2. See California Fruit Growers Exchange v. Sunkist Baking Company. Would likely be decided differently today. Exchange has employed the trade mark Sunkist in the sale of over 2 billion dollars worth of goods and has expanded over 40 million dollars in advertising the trademark. Defendant is Sunkist Baking Co, who sells bread. Holding: There is no likelihood of confusion as to the source of origin of the products. Anyone whose IQ is high enough to be regarded by the law would ever be confused or would be likely to be confused in the purchase of a loaf of bread branded as Sunkist because someone else sold fruits and vegetables under that name. 3. See In Re Martins Famous Pastry Shoppe, Inc: Martins Bread v. Martins Cheese. Holding: There is a likelihood of confusion. Complementary nature of bread and cheese, the goods travel in the same channels of trade and are sold by the same retail outlets. They are likely to be used together as relevant to the question of likelihood of confusion. d. Factor 3: Similarity of the products. i. Courts tend to presume that the likelihood of confusion occurring is enhanced where goods sold under the same or similar marks are themselves similar, the same, or closely related. ii. Goods that are used together (complementary goods) may be considered related in a confusion analysis. (it is not automatic) iii. NOTE: A famous mark often will be protected regardless of dissimilarity of goods/services. iv. NOTE: family of marks (ex: McDonalds McFlurry, etc.) v. See Goto.com, Inc. v. Walt Disney Company. Gotos logo used on the internet v. Disneys Go Network logo used on the internet. Court said they looked glaringly similar, and they are both search engines (and therefore director competitors -raises likelihood of confusion). e. Factor 4: Is the plaintiff likely to bridge the gap? i. See Tiffany & Co. v. Parfums Lamborghini, the court held that a demonstrated intention to enter the perfume filed and recent purchase of plaintiff by a cosmetics and perfume company entitled plaintiff to trademark protection in the noncompeting perfume field. f. Factor 5: Is there evidence of actual confusion? i. While proof of actual confusion is not required to prove likelihood of confusion, when such evidence exists it is often given great weight. Not required for injunctive relief, but some courts require it for monetary relief. ii. See Beacon Mutual Insurance Company v. Onebeacon Insurance Group. The Beacon Mutual Insurance Company v. OneBeacon Insurance Group. Both use lighthouses in their marks. They are direct competitors. Holding: Actual confusion. Past confusion is often a strong indication of future confusion iii. See Beer Nuts, Inc. v. Clover Club Foods Co.. Beer Nuts v. Brew Nuts

1. Beer Nuts I: The Court erroneously used side-by-side comparison. Side by side comparison is not the test. The marks must be compared in the light of what occurs in the marketplace, not in the courtroom. The Court must determine whether the alleged infringing mark will be confusion to the public when singly presented. Look at: Intent, marketing channel, degree of care in picking the item 2. Beer Nuts II : No confusion. Why? Beer Nuts is a weak mark, Brew Nuts is not similar to Beer Nuts, Brew Nuts packaging is not so similar to the trademark Beer Nuts as to create a likelihood of confusion, Not phonetically similar, Lack of actual confusion 3. Beer Nuts III. Reversed. Erred in focusing on the differences between the trademarks. The District Court erred in finding that absence of evidence of actual confusion supports a conclusion that there is no likelihood of confusion. Similarities are supposed to be weighed more heavily than differences. The phonetic and semantic similarities outweigh the differences. Also, a secondary trademark on a small, inexpensive item such as a package of nuts does not eliminate the possibility of confusion because consumers exercise little care in purchasing these products. They are both impulse items. Clover Club intentionally adopted a mark similar to the Beer Nuts mark. The inference of intent is especially strong when the parties have had a prior relationship. There is such a relationship here. No actual confusion does not automatically mean that there is no likelihood of confusion, especially when the products involved are inexpensive. g. Factor 6: What is the quality of s product? i. Lower quality of s product = higher likelihood of confusion. h. Factor 7: What is the sophistication of the buyers? i. The more sophisticated the buyer, the less likelihood of confusion i. Can it be based on one factor? Yes. i. See Champagne Louis Roederer v. Delicato Vineyards. Cristal Champange v. Crystal Creek Issue: Can the Court make a determination based on 1 factor? Yes. One factor can be so dispositive that the court is justified in making a decision based upon 1 factor. There is no infringement here. There is a dissimilarity in the look of the marks, and the sound of the marks (way it is pronounced.) 2. Is there evidence of initial sale confusion? a. At first you are confused, but you correct yourself before making a purchase. 3. Is there evidence of post sale confusion? a. You were not confused buying the product, but could confuse others that see it after you buy it. Could prevent others from purchasing the product (ex: fake Rolex) b. See Ferrari S.P.A. Esercizo Fabriche Automobili e Corse v. Roberts: Roberts was making body kits that replicated Ferraris. This was a trade dress claim. says that he tells the purchasers that the kits are fake, so there is no confusion. Holding: There is infringement here. The Latham Act was intended to do more than protect consumer at the point of sale. Since Congress intended to protect the reputation of the manufacturer as well as to protect purchasers, the Acts protection is not limited to confusion at the point of sale. The injury derives in part from the fact that post-sale non purchasers may be prospective purchasers, with the confusion potentially affecting their future purchasing decisions. 4. Is there evidence of reverse confusion? a. When the legitimate prior users goods or services become likely to be perceived as those of the junior user. b. See Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co. Big O was a tire-buying organization. Goodyear was also a tire manufacturer at that point. Plaintiff had started using the name "Bigfoot" on its tires but could not register it.. Defendants then requested plaintiff for giving a no objection to use its name on their product. Plaintiff asked defendant to discontinue the use of their name on their product. Despite plaintiff's doing so defendants continued to use plaintiff's name. Holding: Reverse confusion.

c. See Dreamwerkers Production Group, Inc. v. SKG Studio, dba Dreamworks, SKG.: Plaintiff was a small company that does Star Trek conventions; Defendant was a large movie studio. Claims that there was confusion to where the plaintiff came from (reverse confusion). The Ninth Circuit asserted that the appropriate question was whether consumers doing business with the senior, lesser-known user, were likely to think they were, in fact, negotiating with the junior, better-known user. The court, applied three factors to determine whether likelihood of confusion existed between the marks of Dreamwerks and DreamWorks. The factors were (1) arbitrariness of the mark, (2) similarity of sight, sound and meaning, and (3) relatedness of the goods. 5. Is there evidence of intent? a. Intent is not required for infringement, but if found, is very persuasive. Intentional copying of a functional element is okay. Only protectable elements are protected. b. See My-T-Fine Corporation v. Samuels. is a manufacturer of a confection of chocolate and sugar, used in making a kind of pudding, and sold in small cardboard boxes. The s box was substantially the same size, was solidly of about the same shade of green, but had no red stripes along the edges. eventually added the red stripes. The boxes looked very similar. Holding: is granted an injunction to stop to make the boxes, but only the ones with the red stripes on them. Defendant actually copied the designs on the packaging; tried to get close to the plaintiffs product, but not to the line of infringement c. See Kemp v. Bumble Bee Seafoods, Inc. Kemp sold his seafood business to Oscar Meyer, who then sold it to Tyson, who then sold it to Bumble Bee. The companies spent over $49 million to promote and advertise the Kemp brand. Kemp began to commercially use the Kemp mark on wild rice, chicken, and wild rice soup. Bumble Bee claimed trademark infringement. Holding: There is a likelihood of confusion, and therefore, infringement was found. Kemp made clear his intention to take advantage of the goodwill and brand equity that Bumble Bee and its predecessors had built in the trademark. Kemps contract allowed Kemp to use a related mark upon Oscar Meyers approval, which Kemp did not seek. Under the doctrine of progressive encroachment, it is unlawful to appropriate piecemeal a means for trade identity that could not be taken as a whole. 6. Is this a case of counterfeiting? a. Definition: Intentionally deceiving purchasers into believing that the imitative product, made at less expensive and often sold at a lower price, is the genuine item. DO NOT USE POLAROID FACTORS! It is strict liability. b. May result in: dangers to the public health, serious damage to the business and reputation of the trademark owner, who is perceived as sponsoring inferior quality goods which fall apart or fail to function as advertised. c. NOTE: Counterfeiting act only applies to federally registered trademarks (another reason to register your mark!). Also, trade dress is not covered by the Counterfeiting Acts unless it is registered as a trademark. d. See Louis Vuitton S.A. v. Lee: Lee owns a shop in Chicago that sold fake LV merchandise. claimed that he did not know that the products were fake, and did not ask her distributor if they were or not. Holding: This is infringement. She could have hardly have thought she was buying the genuine article for manufacturers of highfashion leather goods do not distribute them to retail outlets through itinerant peddlers, do nto line the goods with purple vinyl, and do not seek them at prices which permit the retailer to make money reselling them for $37.80. She was obligated, at the very least, to ask her supplier whether the items she was getting were real. e. Criminal Counterfeiting. The criminal sanctions apply to whoever intentionally traffics or attempts in traffic in goods or services and knowingly uses a counterfeit mark on or in connection with such goods or services. 7. Is this a case of contributory infringement? a. There are two claims available: (1) contributory infringement, and (2) vicarious infringement.

i. Contributory Infringement: must have (1) intentionally induced the primary infringement or (2) continued to apply an infringing product to an infringer with knowledge that the infringer is mislabeling the particular product supplied. ii. Vicarious Infringement: (1) the and the infringer have an apparent or actual partnership, and (2) have authority to bind one another in transactions with third parties or exercise joint ownership or control over the infringing product. b. See Inwood Laboratories, Inc. v. Ives Laboratories. After plaintiffs patent expired, a generic drug was made that was the same color, shape, etc. The defendant was encouraging pharmacists to substitute the generic drug for the name brand. If 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, the manufacturer or distributor is contributory responsible for any harm done as a result of the deceit. c. See Hard Rock Caf Licensing Corp. v. Concession Services, Inc. Investigators found a location selling counterfeit Hard Rock t-shirts. Suing for contributory negligence. CSI (the store) believes it is not liable. Contributory Liability: Its not clear how the doctrine applies to people who dont not actually manufacture or distribute the goods that is ultimately palmed off as made by someone else. Look at the relationship with the manufacturer. Vicarious liability: Court did not find vicarious liability. d. See Perfect 10, Inc. v. VISA Intern. Service Ass. Other websites were taking Perfect 10s copyrighted pictures and publishing them. Perfect 10 sued Visa because the websites accepted Visa credit cards. Contributory Trademark Infringement: No. Plaintiff has not pled facts showing that intentionally induced infringement of s mark.The infringement occurs without any involvement of the defendant and their payment system. Vicarious Trademark Infringement: No. claims that the Visa has a symbiotic relationship with the infringing sites, and that s acceptance of a charge binds the stolen content website to provide the infringing images to third parties. Court disagrees. e. See Tiffany, Inc. v. eBay, Inc. Tiffany claims that eBay is liable for counterfeit Tiffany products are sold on eBay. Tiffany sells only through their store/website. Tiffany claims that 73-75% of products sold on eBay were counterfeit. eBay claims that they never see the products. eBay has many programs to look for counterfeits, also has a takedown program. eBay also used special warning messages to those listing Tiffany items. Suspended hundreds of thousands of sellers that sold counterfeits. claim that eBay advertised Tiffany products. Contributory Trademark Infringement: No. eBay did enough when they found out about counterfeit items being sold. Tiffany also claims that eBay knew/had reason to know that people were selling Tiffany products on eBay. Tiffany claims that this widespread knowledge (general knowledge) causes eBay to meet the know or reason to know element of contributory infringement. (Court said no; party must have more than general knowledge) 8. Is this a case involving gray market goods? a. Gray Market Goods: Goods bearing an authentic trademark that are intended for distribution in foreign countries but which are instead imported and sold to the ultimate consumer in a country where the trademark signifies a domestic source. As a result, these authorized goods often compete directly with goods imported and sold by the manufacturers authorized distributor. Regardless of whether source confusion is present, many opponents of parallel imports object to parallel importers: free riding on the advertising, warranty, and service efforts of the U.S. company, while selling the same product at a lower price b. What to look for: (1) Are the companies related? (2) Is there a material difference between the products? (Gray market goods are usually legal unless the owners are different, or there is a material difference between the goods) c. See A.Bourjois & Co v. Katzel. Plaintiff was the assignee of a trademark in the United States from a French company. The French company continued to produce identical goods, including those it sold to plaintiff. Katzel imported genuine merchandise from France and sold it under the plaintiffs trademark in the United States. Holding: Sale of the grey-market merchandise infringed the U.S. trademark on the assignment from the

French company because the French firm could no longer sell its wares in the United States, it could not authorize another to do so. d. See Prestonettes, Inc. v. Coty. Defendant purchases plaintiffs genuine powder, subjects it to pressure, adds a binder to give it coherence and sells the compact in a metal case. also buys perfume, puts it in a smaller bottle, and sells it. Defendant put on the bottles, Prestonettes, Inc., not connected with Coty, states that the contents are Cotys independently rebottled in NY Holding: This is not a suit for unfair competition. It stands upon the plaintiffs rights as owner of a trademark registered under the act of Congress. The question here should be whether the plaintiff has the naked right alleged to prohibit the from making even a collateral reference to the s mark. e. See Osawa & Company v. B & H Photo. The gray marketer sold cameras at prices far below the prices of authorized US dealers and without the manufacturers standard warranty. Finding material differences, the court noted that the US distributor had devoted extensive expenditures, activities and energies to the successful development of goodwill for the brand. Also, confusion can result from wide price disparities between legitimate and grey imports because consumers will wonder why the same equipment can be purchased so much more cheaply overseas. Such price disparity can result in disaffection among authorized dealers, which in turn creates a substantial risk of loss of enthusiasm or bad-mouthing (where it matters most since buyers are likely to look to dealers for advice on brands and equipment). f. See Lever Brothers Company v. United States. Soap was being brought in from British affiliate company. Material Difference factor: products were formulated differently to suit local tastes. The sale of gray market goods which differ "materially" from goods sold by the trademark owner in the United States violate the United States trademark owner's rights. The differences between the soaps were material. The court's holding distinguished between goods produced abroad and then imported into the United States under the affiliate exception rule which were identical to those intended for sale in the United States and goods produced abroad which were materially different. The latter infringed the trademark owner's rights. 9. Is this a case of trade dress infringement (see Qualitex)? a. Elements: (1) it is trade dress; (2) it is non-functional, (3) it is distinctive (inherently or acquired with secondary meaning), (4) there is a likelihood of confusion. 10. Were surveys used as evidence? a. Survey evidence has been used in issues such as secondary meaning and likelihood of confusion. Surveys provide persuasive evidence of potential/actual consumer reactions. b. Requisites for a properly conducted survey: (1) Conducted within a proper universe; (2) Subjects constitute a fair and representative sample of that universe; (3) Unbiased questions ; (4) Conducted with proper security so that the interviewers do not know who they represent; (5) Properly tabulated, verified, and interpreted from an expert. i. Relevant Universe: the potential customers. In Amstar, 71% of respondents thought the maker of female household members at home, whereas at that time the primary purchasers of defendants pizza were shown to be single male college students. The court stated that the appropriate universe should include a fair sampling of those purchasers most likely to partake of the alleged infringers goods or services. ii. Bias. In Wuvs International, the Court found the question, do you believe that this restaurant is connected with or related to any other restaurants, to be unnecessarily suggestive because it limited respondents choices to other restaurant operations. iii. Environment. In Scotch Whiskey America, the court found that, while the survey was not performed in an actual purchasing situation, this did not significantly undermine the weight of the survey findings because the universe was properly defined. iv. Agreed Survey Formats. Look up what that particular court has accepted as an acceptable form. v. Secondary Meaning Surveys. Have been successfully used. Requires a higher result that for likelihood of confusion.

vi. Deceptive Advertising Surveys. Surveys are often used to demonstrate that an advertisement conveys a deceptive message to consumers. c. See The Scotch Whiskey Assn v. Consolidated Distilled Products, Inc. Plaintiff opposes the registration of Loch-A-Moor as a trademark on the ground that the mark is allegedly deceptive as to the geographic origin of s product; Loch-A-Moor mark falsely describes the product as having Scotland as its place of origin. The survey asked 2 questions: (1) Where do you think this liquor comes from? (2) Why do you think it comes from (#1)? Based on the survey evidence, the Court finds that the mark is likely to mislead consumers to believe that the geographic origin of the product is Scotland. d. See Indianapolis Colts, Inc v. Metro. Baltimore Football Club Limited Partnership: wanted to call itself the Baltimore CFL Colts. claim that consumers of the merchandise are likely to think, mistakenly, that the new Baltimore team is an NFL team related in some fashion to the Indianapolis Colts, formerly the Baltimore Colts. Both parties presented surveys. Among self identified football fans, 64% thought that the Baltimore CFL Colts was either the old NFL Baltimore Colts or the Indianapolis Colts. Found for plaintiff. Reasoning: How much do you need? (1) 15-20 % for confusion; (2) 30-40% for secondary meaning. 11. Was it an ornamental use of the mark? a. See Boston Professional Hockey v. Dallas Cap & Emblem The NHL sought to enjoin from manufacturing and selling embroidered emblems depicting the marks of the teams. has secured federal registration of their team symbols as service marks for ice hockey entertainment services. The complaint alleged that defendant's manufacture and sale of the team symbols is an infringement of the plaintiffs' registered marks. Issue: Was there a trademark infringement? Yes. Defendant reproduced the mark with the intent that the pubic recognize and purchase the emblems as the symbol of the Toronto team. 12. Is this an aesthetic functionality case? (buys for the look of it. Ex: flowers on china) a. Test for aesthetic functionality: (1) Is the design feature essential to the use or purpose, or effects the cost of quality of the product at issue? (Is it functional?); (2) If a design feature is functional, our inquiry ends. But, if the design feature is not functional, it must still pass the fact intensive test and be shown not to have a significant effect on competition in order to receive trademark protection. i. Ultimate test for aesthetic functionality. If the recognition of trademark rights in an aesthetic design feature would significantly hinder competition? (if yes no protection). b. See Louisiana State University v. Smack Apparel. LSU claims that Smack violated the Latham Act and infringed their trademarks by selling t-shirts with the schools color schemes and other identifying indicia referencing the games of the schools football team. Smack says that the schools colors serve a functional purpose. However, the fact that a trademark is desirable does not, and should not, render it unprotectable. As to intent, Smacks owner testified that it was no coincidence that his shirts incorporate the University color schemes, and then he designed the shirts to make people think of the particular targeted school. Smack essentially obtains a free ride by profiting from confusion among the fans of the Universities football teams who desire to show support for and affiliation with those teams. It is deception! c. See Jay Franco & Sons v. Franek. Franeck trademarked a circular beach towel. His mark was contested b/c they claimed the shape of Franecks towel was functional. The strong evidence of the round towels functionality is bolstered by Franeks own advertisements, which highlight two functional aspects of the towels design. Franeck chose to pursue a trademark, not a design patent, to protect his towel. He must live with that choice. Not protected. d. See Christian Louboutin v. Yves Saint Laurent (District Court) Louboutin filed a trademark for its red bottom shoes, and it was granted. YSL made a shoe that was completely red, including the bottoms. Louboutin sued, claiming trademark infringement. Issue: Whether the Latham Act extends protection to a trademark composed of a single color used as an expressive and defining quality of an article of

wear produced in the fashion industry. Holding: Because the fashion industry serves ornamental and aesthetic functions vital to robust competition, Louboutin is unlikely to be able to prove that its red outsold brand is entitled to trademark protection, even if it gained secondary meaning. Fashion is dependent on color. Awarding one participant in the designer shows market a monopoly on the color red would impermissibly hinder competition among other participants. Court pointed out the fact that the mark application said that the red was used to attract, to reference, to stand out, to blend in, ot beautify, to endow with sex appeal. These are all non trademark functions of color in fashion. e. Christian Louboutin v. Yves Saint Laurent (Appellate Court). Reversed. Louboutin is granted trademark rights on the red bottom heels, but only when the whole shoe is not red. (if whole shoe is red --- Louboutin does not have protection). There is extensive evidence of Louboutins advertising expenditures, media coverage, and sales success that Louboutin created a symbol within meaning of Qualitex, and that the symbol has gained secondary meaning that causes it to be uniquely associated with the Louboutin brand.

Defenses
1. General Defenses: has not used the mark in commerce; s use of the mark lacks priority over defendants; s mark is generic or was abandoned; s mark is descriptive and lacks secondary meaning; s conduct does not create a likelihood of confusion; and so on. 2. Can the defendant claim laches? a. Those who sleep on their rights, lose them! b. Elements: (1) knew or reason to know of infringing action; (2) unreasonable delay in taking action (almost any delay could meet this requirement; however, a mere lapse of time is not enough to establish a claimneed other elements.); (3) prejudice to the . c. May, and usually do, bar monetary relief, but generally it will not preclude injunctive relieve against a continuing infringer. d. See Internet Specialties West Inc v. Milon-Digiorgio Enterprises, Inc. IS-West.com v. ISPWest.com. IS did not at first bring a suit because they didnt provide the same services. However, ISP eventually expanded into that type of service, and then IS sued. Holding: Cannot assert laches. IS was not entitled to wait until MDEs business grew large enough to constitute a real threat, and then sue for trademark infringement, however the court did not find prejudice to . 3. Can the defendant claim acquiescence? a. Definition: Active consent by the trademark owner to another use of the mark. b. Elements: (1) plaintiff affirmatively represented it would not assert a right or claim; (2) delay between the active representation and assertion of the right or claim was not excusable; (3) delay caused undue prejudice. c. See Sunamerica Corp. v. Sun Life Assurance Co. of Canada. Both parties are in the business of selling annuity products to American consumers. Both parties have used the service mark Sun Life alone or in combination with geographic modifiers and other descriptive terms for over 70 years. Holding: Successful defense of acquiescence. SLA claims that SLC knew of and affirmatively consented to SLAs use of the marks. Evidence shows that there is actual confusion between the various Sun Life marks. 4. Can the defendant claim unclean hands? a. See Coca-Cola Co. v. Koke Co. of America. Coke brings infringement; defendant claims that Coke has unclean hands because the name coca cola infers that the product has cocaine in it, and therefore misrepresents the product. claims that since the has unclean hands, they should not be able to bring a claim. Holding: No, not misrepresentation. The name now characterizes a beverage to be had at almost any soda fountain. The mark has acquired a secondary meaning in which perhaps he product is more emphasized than the producer but to which the producer is entitled. b. See Haagen-Dazs, Inc. v. Frusen Gladje LTD. HD claims that have packaged their product in such a way as to cash in on the commercial magnetism of the exclusive marketing technique developed. HG focuses on 5 features on the s container: (1) phraseology used in reciting the ingredients of the product in issue; (2) recitation of the artificial ingredients not contained in the product; (3) manner in which the product is to

be eaten in order to enhance its flavor; (4) a 2 word germanic sounding name having an umlaut over the letter a, and (5) a map of Scandinavia. (Stealing the Scandinavian scheme.) Holding: Plaintiff itself has attempted to package its product in such a way as to give the impression that it is of Scandinavian origin, although it too is, in fact, of domestic origin, it is guilty of the same deceptive trade practices of which it accuses . (Plaintiffs hands are unclean) c. Should using on an unregistered trademark constitute as unclean hands? No, because misunderstandings about the use of federal registration symbols are common where the use was negligent or immaterial to the litigation. 5. Can the defendant claim fair use? a. Law does not prohibit the use of anothers trademark on or in connection with the sale of ones own goods or services as long as such use is not deceptive. Comparative advertising is allowed. Resale by the first purchaser of an originally trademarked item is generally permitted under the first sale doctrine b. Fair Use. 2 Types: i. Nominative: Refers to plaintiffs trademark; our laptop cost less than Apples. (use of anothers mark to truthfully refer to a particular product for purposes of comparison, criticism, point of reference and the like.) 1. Test (See NKOTB v. News America): (1) product must not be one readily identifiable without the use of the mark, (2) is the use only to the extent necessary? (3) must not suggest sponsorship or endorsement. ii. Descriptive: Refer to s product, dont give mom an apple, give her a ______. (Uses of descriptive term which also happens to be somebody elses mark to describe s own similar product) c. Comparative Advertising. It is OK if it is: (1) truthful, (2) trademark is not altered, and (3) the purpose is to compare the merits of the goods. (See Deere & Company v. MTD Products) d. See Champion Spark Plug Co. v. Sanders. Plaintiffs manufactured spark plugs; Defendants sold reconditioned plugs without notice of reconditioning. Whether or not they can use manufacturers mark? Yes. Theyre second-hand but theyre still Champion spark plugs. Must label Repaired or Used; Full disclosure gives the manufacturer all the protection to which he is entitled. Demonstrating holder/producer interests re: passing off and deception. There is no showing of fraud or palming off. e. See Societe Comptoir De LIndustrie Cotonniere Establissements Boussac v. Alexanders Department Stores, Inc. s marks, Dior and Christian Dior, registered. used the name Dior and Chrisitan Dior extensively to promote the sale of the garments copied from original creations designed by the house of Dior. Tags (and advertisments) said, Original by Christian Dior Alexanders Exclusive Paris Adaptation. Issue: Can use Dior and Christian Dior in marketing their products? Yes The Latham Act does not prohibit a commercial rivals truthfully denominating his goods a copy of a design in the public domain, though he uses the name of the designer to do so. But the right of the complainant in his mark is limited to dilution which is brought about by confusion as to source or affiliation. The interest of the consumer here in competitive prices of garments using Dior designs without deception as to origin, is at least as great as the interest of plaintiffs in monopolizing the name. f. See Cosmetically Sealed Industries, Inc. v. Cheesebrough-Ponds USA Co. CSI marketed a lip-gloss with the registered mark "SEALED WITH A KISS." The company also made other products marketed with the word "Sealed." Chesebrough, while marketing its own line of lipstick, initiated a promotional campaign where it invited consumers to take one of their postcards, apply their lipstick, kiss the postcard, and send it to someone special. A sign exhorting customers to "Seal it with a kiss!!" was prominently associated with this display. Holding: Chesebrough could use the fair use defense because the term "Seal it with a kiss!" was not used as a mark, but rather as an invitation to consumers to try its product. The court stated that the fair use defense may succeed even if a likelihood of confusion exists

g. See KP Permanent Make-Up, Inc. v. Lasting Impression, Inc. Both parties sell permanent makeup and have used the term micro color someway. KP claims to have used microcolor for a long time, Lasting denies that KP has been using it for so long. Lasting registered Micro colors in 1992, KP used microcolors in 1999 in their advertising. Lasting sued for infingement. KP claimed that it was the only term to describe the product. Holding: A party raising the classic defense of fair use does not need to negate any likelihood that the practice under question would confuse consumers about the origin of the goods. 6. Can the defendant claim abandonment/loss of rights? a. Trademark rights are lost when the mark no longer signifies the source of the goods/services in connection with which it is used. b. Is the mark generic/has the mark become generic? i. A term is generic when its principal significance to the public is to indicate this product or service itself, rather than the source. ii. Genericide: When a product is so successful that the public adopts the brand name as the name of the product itself, the brand name has passed into the language and the manufacturer who originated it no longer has the exclusive right to use it. Companies, like Xerox, put out ads to try and not to become generic. 1. Those that are the most in danger of becoming a generic term: First product out there, or the market leader. 2. With marks such as Coke, and Google: Although we tend to misuse them, people know that there is a specific brand. It is a fine line between becoming a generic term and retaining your trademark. 3. Examples: Xerox, aspirin, milk of magnesia, google iii. See Kellogg Co. v. National Biscuitt Three Issues: (1) Trademark rights to the name (Shredded Wheat)? (2) Trademark rights to the shape? (3) Is the defendant using the name that is unfair? Three answers: (1) Shredded wheat is generic; also, there is no secondary meaning because consumers do not relate it to the producer of the shredded wheat (2) upon expiration of the patent, it was thrown into the public; also, it is functional. therefore, no protection. (3) The difference in the packaging is distinguishable, no person familiar with product would be misled iv. See Philipino Yellow Pages. Can on establish the term Philipino Yellow Pages? No. Who-are-you/what-are-you test: if the primary significance of the trademark is to describe the type of product rather than the producer, the trademark is a generic term and cannot be a valid trademark. Court looked at third party uses of yellow pages. Court found that yellow pages was a generic term. Not a descriptive term with a secondary meaning. v. Examples of generic holdings: Yellow cab, light beer (claimed light was a trademark, court said no), honey brown beer found not to be a trademark (it has honey, and it is brown), lawyers.com cannot register as a trademark, apple (generic for fruit, valid trademark for electronics) vi. Repature of generic terms. The only time this has really occurred is in Singer. vii. NOTE: No word or term is restricted from becoming generic, it really depends on the public perception viii. Prevention and education: trademark owners can take measure to help prevent a distinctive term from becoming generic. Ex: instruction of salespeople, publication on correct usage distributd to customers, estensive surveillance by legal and advertising departments, protective advertising. c. Has the mark been abandoned? i. Once you stop using the mark with no intent to reuse, you lose your rights. How long is non-use? About 2-3 years, but can be rebutted. ii. Intent to Resume Use: A mere statement of a subjective intent to resume is not enough to overcome the presumption of abandonment arising from three years of non-use. iii. Persistent goodwill: you can protect goodwill after abandonment. Not claiming infringement, claiming that it is confusing the public/misleading the public.

iv. Modernizing a mark, tacking: Abandonment may result if the modernized mark is too different from the old mark, and priority will then be measured from the first use of the new mark. The key in trademark modernization is maintaining the continuity of the commercial impression between the old and new marks. If a company changes their logo slightly (ex: Starbucks), they keep their rights for protection. v. See Exxon: Company had a trademark maintenance program for HUMBLE. Issue: They were still technically using it, but was the use legitimate (was it token use)? No.The Latham Act does not allow the preservation of a mark solely to prevent its use by others. Here, Exxons use was insufficient, it was just token use. Exxon had abandoned the mark. You have to show an intent to resume use. vi. See Amrbrit v. Kraft: Ambrit owned the Klondike bar. Kraft started to develop its own car and called it the Polar Bar. The functional features of the Polar Bar package closely resembled the Klondike bar. Ambrit filed a suit, wanting to cancel Krafts mark because it was abandoned by Kraft since 1932. Holding: Kraft abandoned the Polar Bar mark. Kraft did not use the mark from 1932 -1980, and therefore it was the use was discontinued. The only question is that if Kraft intended to resume meaningful commercial use of the mark. The only evidence Kraft gave that it planned on resuming use is that it renewed the registration of the mark throughout that time period. This, however, is insufficient to rebut abandonment. d. Has the lost rights through licensing and franchising? i. Licensing: rights to use the mark, but you retain ownership of the mark. Doesnt have to be in writing but it should be. 1. What should the license include? (1) the mark or other means for trade identity involved (be specific); (2) goods or services in connection with which it is to be used; (3) the standards of quality for the goods/services; (4) the methods of supervision and control; (5) any limitations on territory, sublicensing, or the sale of competing goods; (6) the time period or duration of the license and reversion of all rights after termination; (7) the termination of rights of both parties for breach of the license agreement. 2. Trademark owner must exercise quality control over the licensee. Without quality control = naked license (and invalid). If you state quality control in the contact, but there is none in trouble. If you do not state quality control in the contract, but there is quality control youll be ok. Can the licensor rely on the licensee for quality control? No. Not usually, unless there is some special relationship between the parties. 3. See Dawn Donut:. owned registered trademarks 'Dawn' and 'Dawn Donut,' carrying out business in Michigan area. Plaintiff was actively carrying out business using trademarks, but she had not used its trademarks at a retail level in defendant's market area. Defendant had used plaintiff's trademark for the sale of its doughnuts and baked foods in and around Rochester area. Plaintiff filed a suit against defendant for trademark infringement in the district court. Defendant filed a counterclaim in response against plaintiff to cancel plaintiff's registrations on the ground the plaintiff had abandoned its trademarks due to inadequate quality control and supervision on the part of its licenses.. Plaintiff's failure to license its trademarks in defendant's trading area did not signify an abandonment of the rights in that area. Since plaintiff had used its trademark continuously at the retail level, it had not abandoned its federal registration rights even in defendant's trading area. ii. Franchising: pretty much the same thing as licensing. There used to be a lot of abuse of franchisees, so many laws were passed to regulate franchises. Now, it is an extremely regulated area. In order to avoid these regulations, try to have your operation not classified as a franchise. 1. Prongs of a franchise: (1) right to use trademark; (2) fee for participation; (3) franchisor controls method of doing business. Try to not fulfill all three requirements in order to not be classified as a franchise, and not have to adhere to the regulations.

2. See Stanfield v. Osborne Industries, Inc. Naked Licensing: when a licensor allows a licensee to use the mark on any quality or type of good the licensee chooses. This causes the mark to lose significance. When a licensor allows this, without having control over the quality of goods produced by licensee, such a practice is inherently deceptive and constitutes abandonment of any rights to the trademark by the licensor. 3. See Original Great American Chocolate Chip Cookie Company v. River Valley Cookies, Limited. Franchisee committed a number of material breaches. Cookie Company terminated the franchise. Franchisee pretended that the contract was still in effect and refused to vacate the premises, and violated the franchise agreement by selling unauthorized products. They said they couldnt stop selling under the companys name because if they did, the would have been forced to default on their promissory note. Issue: Whether the Cookie Company is entitled to an injunction? Holding: Yes. Franchisee had unclean hands when they materially breached the agreement. iii. Phase Out Use. Courts have been uniformly unwilling to penalize settlement efforts where a trademark owner is granted an infringer a phase out period. (Courts allow phase out periods). This is a period where the infringer phased on use of the mark and disposed of inventory in settlement of a dispute. This is not usually the case, however, in counterfeiting cases. iv. New Use by License. A licensor can authorize a licensee to extend use of a trademark to new or different products or services, if quality control is exercised.

Dilution
1. Purpose of dilution statutes: protection of distinctive quality of a mark, even in the absence of likelihood of confusion, against such use by another as may degrade or decrease that distinctiveness. 2. MUST BE A FAMOUS MARK to be protected from dilution. (Factors from Latham Act: (1) duration and extent of use of mark, (2) duration and extent of advertising for the mark, (3) geographic area in which mark has been used, (4) degree of distinctiveness of mark, (5) degree of recognition of the mark, (6) the method by which product was distributed/marketed, (7) use of mark by 3rd parties, (8) whether it is federally registered.) 3. Two claims of dilution: (1) dilution by blurring, and (2) dilution by tarnishment 3. Is there a claim of dilution by blurring? a. Current federal law: see handout: The Trademark Dilution Revision Act of 2006 b. An association from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark, and may be found regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury. b. 6 Federal factors (non-exhaustive): (1) degree of similarity between the marks (does not require substantially similar); (2) degree of inherent or acquired distinctiveness of the famous mark; (3) extent to which owner of the famous mark is engaging in substantially exclusive use of the mark; (4) degree of recognition of famous mark; (5) whether the user of the mark intended to create an association with the famous mark; (6) any actual association between the mark or trade name and the famous mark. c. Other factors used: (1) similarity of the marks; (2) similarity of the products; (3) sophistication of customers; (4) defendants predatory intent; (5) fame of the senior mark; (6) fame of the junior mark. d. See Mead Data Central, Inc v. Toyota Motor Sales, U.S.A., Inc. Whether Toyotas use of Lexus is likely to dilute the distinctive quality of LEXIS. No. The strength and distinctiveness of LEXIS is limited to the market for its services attorneys and accountants. Because only one percent of the general population associates LEXIS with Meads services, it cannot be said that LEXIS identifies that service to the general public and distinguishes it from others. For the general public, LEXIS has no distinctive quality that LEXUS will dilute. e. Does the defendant have a claim of parody? (Also see freedom of speech) i. If a famous mark is particularly strong and distinctive, it becomes more likely that a parody will not impair the distinctiveness of the mark

ii. Parodying a famous mark is protected by the fair use defense only if the parody is not a designation of source for the persons own goods or services. iii. See Louis Vuitton Malletier v. Haute Diggity Dog LLC. Did the dog toy company dilute the Louis Vuitton brand by making a toy called Chewy Vuiton? Holding: Toy companys use was a parody and did not dilute by blurring because it did not impair the distinctiveness of Louis Vuittons mark, as required under the TDRA. In fact, the court determined that the fame of the LV mark was a hindrance to LV because it is so famous, strong, and distinctive. Because of this, a parody will not impair the distinctiveness of the mark. iv. See Mattel v. Aqua Barbie Girl Mattel sued the band Aqua. The court held that the claim fails because the song lampoons the Barbies image and comments humorously on the cultural values Aqua claims she represents. 4. Is there a claim of dilution by tarnishment? a. An association arising form the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark May be tarnished when it is linked to products of shoddy quality, or is portrayed in an unwholesome or unsavory context, with the result that the public will associate the lack of quality or lack of prestige in the defendants goods with the plaintiffs unrelated goods. b. Examples: BUTTWEISER T shirts dilutes Budweiser. GREATEST BAR ON EARTH service mark for night club did not tarnish the wholesome, family oriented image of Ringling Bros. GREATEST SHOW ON EARTH c. See Deere & Company v. MTD Products, Inc Deere logo is widely recognizable and a valuable business asset. MTD was using the Deere logo without authorization for the purpose of comparing Deeres line of lawn tractors to MTDs Yard-Man tractor. Intent was to identify Deere as market leader and convey that Yard-Man was of comparable quality but less costly. MTD crossed the line. Takes the logo and portrays it in a negative way. Alterations of that sort are properly found to be within NYs concept of dilution because they risk the possibility that consumers will come to attribute unfavorable characteristics to a mark and ultimately associate the mark with inferior goods and services. d. See Starbucks Corp. v. Wolfes Borough Coffee, Inc. Defendant started selling a dark roasted blend of coffee called Charbucks Blend and later Mr. Charbucks. Showed a picture of a black bear above the large font BLACK BEAR MICRO ROASTEREY. Starbucks sued, but Charbucks continued to sell it. Holding: Dilution by blurring: Starbucks and Charbucks are minimally similar. Packaging is different in imagery, color, and format from Starbucks logo and signage, Charbucks appears only on the packaging and on their website in which the marks similarity is demonstratively minimal (not presented to public outside context of normal use). Dilution by tarnishment: A mere association between Charbucks and Starbucks coupled with a negative impression of the name Charbucks is insufficient to establish a likelihood of confusion of dilution by tarnishment. Also, not a parody. 7. See Moseley v. Victorias Secret Catalogue, Inc Moseley owns and operates a retail store named Victors Little Secret; which sold intimate lingerie. Victorias Secret sued for: federal dilution under FTD Holding: Court ruled that plaintiff must show an actual lessening of the capacity of a famous mark to identify and distinguish goods or services. (Held that the FTDA requires a showing of actual dilution, rather than a likelihood of dilution). Did not explain what such proof might involve. (THIS WAS BEFORE CURRENT FEDERAL LAW WAS PASSED PASSED IN PART BECAUSE OF THIS CASE). 9. See Levi Strauss & Company v. Abercrombie & Fitch. Levi Strauss claimed that A&F copied a stitching design on jeans. Issue: Whether the junior mark must be identical or nearly identical to the senior mark to establish dilution by blurring. Holding: Congress intended the degree of similarity to be a factor, but did not intend: (1) for it to be a controlling factor, and (2) the requirement for substantial similarity. Instead, a plaintiff must show, based on the factors, including the same of the similarity, that a junior mark is likely to impair the distinctiveness of the famous mark.

Freedom of Speech

1. First Amendment: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press... 2. Commercial speech, which includes trademarks, is protected but is protected somewhat lower than that for noncommercial speech. a. Supreme Court laid of a test to determine whether a particular commercial speech regulation is constitutionally permissible. i. Is it unlawful or misleading? If yes not protected. If no continue to #2 ii. Is the asserted governmental interest substantial? iii. If yesDoes the regulation directly advance the governmental interest? iv. If yes Is it not more extensive than is necessary to serve that interest? v. If yes then it is constitutional!!! 3. See Rogers v. Grimaldi: Whether Rogers can prevent the use of the title Ginger and Fred for a fictional movie that only obliquely relates to Rogers and Astaire. a. Facts: Italian director makes movie with famous people names. Plainitff sues and states that the defendants (1) violated Lanham Act by creating the false impression that the film was about her or that she sponsored, endorsed, or was otherwise involved in the film, (2) violated her common law right of publicity, and (3) defamed her and violated her right to privacy by depicting her in a false light b. Rule: Because the title Ginger and Fred actually relates to the movie and its artistic expression, it is perfectly fair to use titles that may also represent other people/works. 4. Is the defendant claiming it is a parody? (Also see dilution) a. Parody: a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the marks owner. It must convey two messages: (1) that it is the original, but also that (2) it is not the original and is instead a parody. The second message must communicate some element of satire, ridicule, joking, or amusement. b. The strength of the mark may actually make it easier for the consumer to realize that the use is a parody. c. An intent to parody does NOT automatically = a likelihood of confusion. A parody normally must take aim at or s mark, rather than merely use plaintiffs mark to make an unrelated point. If the use of the mark is irrelevant to the point of the parody, the parody may enjoy no First Amendment privilege. When the parody is so similar that consumers cannot tell it is a parody, an injunction may be issued. d. A humorous reference in s ad to s mark may be permissible where uses only limited elements of the mark and it is perfectly clear that defendants reference is a spoof, even though s purpose is entirely commercial. e. See Cliff Notes v. Spy Notes. Spy Notes makes a satirical book. Spy Notes is nothing like Cliff Notes except for the front cover. Similar cover does not make it parody. One must look at the totality of the book. The cover is different. Spy Notes does not have summaries of novels like Cliff Notes. The word Satire is on the cover and back over 5 times. Cliff Notes focuses on famous books. Spy Notes do not. Holding: only slight risk of consumer confusion; The degree of risk of confusion does not outweigh the well-established public interest in parody. No injunction. f. See Mattel v. MCA Records Aquas use of Barbie is not an trademark infringement. Barbie is used to title a song and is relevant to the work. Title does not mislead as to the source of the work. Claim that Barbie song dilutes Mattel: (1) Is it a famous and distinctive mark? Yes. (2) Does the song amount to a commercial use in commerce? Yes. It refers to a use of a famous and distinctive mark to sell goods other than those produced or authorized by the marks owner. Aqua created and sold to consumers in the marketplace commercial products the album. (3) Is it dilutive? To be dilutive, use of the mark need not bring to mind the junior use alone. The distinctiveness o the mark is diminished if the mark no longer brings to mind the senior user alone. (4) Is there an exception? Three exceptions are comparative advertsing, news reporting and commentary, and noncommercial use. Barbie girl is not purely commercial speech, so it is fully protected by the First Amendment. Holding: If speech is not purely commercial, that is if it does more than propose a commercial

transactionthen it I entitled to full First Amendment protection. Also, the use of the mark in the song title was relevant to the underlying work. g. See Rosa Parks v. Outkast. Courts have adopted three approaches to balance First Amendment interests wit the protections of the Lanham Act: (1) likelihood of confusion test; (2) alternative avenues test; and (3) Rogers v. Grimaldi Test. i. Alternative avenues test a title of an expressive work will not be protected from a false advertising claim if there are sufficient alternative means for an artist to convey his or her idea. ii. Rogers Test a title will be protected unless it has no artistic relevance to the underlying work, if there is artistic relevance, the title explicitly misleads as to the source or the content of the work. iii. Court uses Rogers test and holds that the title of the song had nothing to do with Rosa Parks. h. See Dallas Cowboys v. Pussy Cat Cinemas. Erotic theatre put on a play where Texas Cowgirl cheerleaders perform sexual acts, etc. Dallas Cowboys NFL team sued the theater company. Issue: Can parodies can be prohibited on the basis that plaintiffs right in its mark is a property right that defendant has no First Amendment right to use if alternative avenues are available to defendant to make his point? Yes. The publics belief that the marks owner sponsored or otherwise approved the use of the trademark satisfies the confusion requirement. Also, this case used the alternative avenues test. The uniform in the porno unquestionably bring to mind the Dallas Cowboy Cheerleaders; It injures the reputation as well. i. Coca-Cola Co. v. Purdy. Purdy was using domain names like drinkcoke.org, etc, to link to anti-abortion site. Purdy claims that the first amendment entitles him to use the domain names at issue to attract internet users to websites containing political expression and criticism of the plaintiffs. Issue: Whether the first amendment protects a misleading use of plaintiffs marks in domain names to attract an unwitting and possibly unwilling audience to Purdys message. No. The first amendment protects those who are using the Internet to express their thoughts of abortion, but it cannot cause confusion. It does not protect the deceptive use of the domain names j. See Louis Vuitton vs. Chewy Dog Company. Blurring claim: LV failed to make out a case of trademark dilution by blurring by failing to establish that the distinctiveness of its marks was likely to be impaired by Chewy Dogs marketing and sale of its Chewy Vuiton products. Tarnishment claim: LV has to show that the use of Chewy Vuiton harms the reputation of the LV mark. LV couldnt do this. Parodying a famous mark is protected by the fair use defense only if the parody is not a designation of source for the persons own goods or services.

Right of Publicity
1. Right of publicity: the exclusive right of an individual to the commercial exploitation of his or her identity, including name, likeness, and other identiy attributes; A celebritys right of publicity is invaded whenever his identity is intentionally misappropriated for commercial purposes. 2. Factors: (1) Use of s identity, likeness; (2) Appropriation of s advantage; (3) No Consent; (4) Injury 3. See Zacchini v. Scripps- Howard Broadcasting. Man performs a human cannonball performance. Some bitch came in and recorded it, put it on the news. He doesnt seek to enjoin the broadcast of the performance, he just wants to be paid for it, and thats ok! 4. See Vanna White v. Samsung. Ad by Samsung depicted a robot, that very much resembled Vanna White. referred to it as the Vanna White ad. was not paid, and did not give consent for the ad. The robot at issue was not plaintiffs likeness within the meaning of 3344, and therefore Vanna did not have a viable claim of violation of right to publicity. 5. See Wendt v. Host International. Wendt, an actor in the TV show Cheers, brought suit against Host International and Paramount Picture Corporation. Host created robotic figures that the actors claimed were based on their likenesses, and placed them in airport bars that were modeled on the Cheers set. Does the robot so closely resemble Wendt so as to cause appropriation of a likeness? The court held that this was up to a jury to decide and remanded to trial.

6. See C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media. C.B.C brought action to establish a right to use, without a license, the names of and information about major league baseball players in connection with fantasy baseball products. AM counterclaimed, saying that CBC violated rights of publicity belonging to the players. Holding: No violation of right to privacy. The information used by CBC fantasy baseball games is all readily available in the public domain. 7. See Hilton v. Hallmark Cards. Hallmark made a card that said, thats hot, and depicted a Paris Hilton look-a-like. Hallmark attempts to use the transformative use defense: whether a product containing a celebritys likeness is so transformed that it has become primarily the defendants own expression rather than the celebritys likeness. Hallmark claims that since the setting was different; court rejects this. It depicts Paris as a waitress, like she was in her t.v. show. 8. See Toffoloni v. LFP Publishing Group. Toffoloni sued LFP (Hustler Magazine) on an invasion of privacy theory claiming that LFP wrongfully published nude photographs of Ms. Benoit who was murdered by her husband. tried to use a newsworthy defense. However, the pictures had nothing to do with the article (which was a simple biography). That piece cannot render the nude pics newsworthy. The pictures were also not related to the incident of public concern (her murder). 5. Newsworthiness exception to the right of publicity (see Toffoloni v. LFP) a. Where the publication is newsworthy, the right of publicity gives way to freedom of the press. b. Needs to be some connection with nude photographs and the article which carries the news. Photographs themselves cannot be newsworthy, especially nude photographs. i. Pictures need to be published with a corresponding news article ii. The published photos need to be related to the incident of public concern or current drama iii. They have to be related in time 5. Transformative Use. If work has transformative elements, it does not threaten the celebritys right of publicity. It is less likely to interfere wit the economic interest protected by the right of publicity and does not generally threaten the markets for celebrity memorabilia that the right of publicity is designed to protect. If transformative elements, it is generally protected by the First Amendment. (See Hilton v. Hallmark) 6. Incidental Commercial Use: If the commercial benefit from the use is only incidentally or indirectly commercial, then a commercial purpose is not predominant, and the use is lawful. 7. Economic Loss: The plaintiff must demonstrate sufficiently that the defendants use has or is likely to result in an identifiable economic loss.

Unfair Trade Practices

1. Is there a case of misrepresentation? a. Latham Act 43(a) summarizes misrepresentation. ANY PERSON who, on or in connection with any goods or services, or any container for goods, uses in commerce an word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which i. Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or ii. In commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another persons goods or services, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. b. This statute has been invoked to prevent misrepresentation that may injure plaintiffs business or personal reputation, even where no registered trademark is concerned. c. See Gilliam v. American Broadcasting Companies, INC. British company wants to stop ABC from showing the Monty Python in an edited version. 24 mins of the original 90 min movie were omitted. BBC claims the broadcast of the American version violated 43(a). Holding: The ABC version mispresented the BBC movie. It omitted climax of

2.

skits and ABC impaired the integrity of BCs work and represented to the public as the product of BBC what was actually a mere caricature of their talents. d. See Fashion Boutique v. Fendi, USA. Fashion Boutique sold Fendi back in the 1980s. Then Fendi opened up big store on 5th ave. 5th ave employees talked shit about the Fashion Boutique store which sold Fendi. That store then lost business and closed. *Gordon and Breach Test* whether representations qualify as commercial advertising or promotion, the contested representations must be: (1) Commercial speech, (2) By a defendant who is in commercial competition with plaintiff; (3) For the purpose of influencing consumers to buy defendants goods or services; (4) Although representations less formal than those made as part of a classic advertising campaign may suffice, they must be disseminated sufficiently to the relevant purchasing public. Under the Lanham Act, businesses harmed by isolated disparaging statements do not have redress under Lanham Act. If the Fendi Store had told its employees to do so, etc., then the defendants misrepresentation could be seen as designed to reach the public. e. See Vidal Sassoon v. Bristol Myers. One shampoo talks shit in a TV advertisement. Holding: where depictions of consumer test results or methodology are so significantly misleading that the reasonably intelligent consumer would be deceived about the products inherent quality or characteristics, an action under 43(a) may lie. f. The Limits of Misrepresentation Claims i. See Dastar v. 20th Century Fox: prohibits Lanham Act claims based on advertisements that falsely claim authorship of an idea. Is there a claim of false advertising? a. 2 theories of recovery are available to a plaintiff who brings a false advertisement claim under 43(a). i. plaintiff can demonstrate that the challenged advertisement is literally false (i.e. false on its face): (1) when it is shown to be literally false or facially false, consumer deception is presumed and the court may grant relief without reference to the ads actual impact on the buying public.(2) An ad can be literally false even though no combination of words between two punctuation signals is untrue, if the clear meaning of the statement, considered in context, is false. (3) Must view the ad and analyze the message conveyed in full context. However, only an unambiguous message can be literally false. If the language or graphic is susceptible to more than one reasonable interpretation, the ad cannot be literally false. ii. plaintiff can show that the ad, while not literally false, is nevertheless likely to mislead or confuse consumers. (1) District court must rely on extrinsic evidence of consumer deception or confusion to support a finding or an implicitly false message.(2) what does the person to whom the ad is addressed find to be the message? Intended deception presumes public deception. b. It is not necessary under 43(a) to prove that a false designation of origin or false descritption or representation was INTENTIONAL. c. Parties have to have standing. Standing: companies have to be in competition. d. If the words or images, considered in context, necessarily imply a false message, the ad is literally false and no extrinsic evidence of consumer confusion is required. (Time Warner v. DirectTV) e. Plaintiff must show that defendants false advertising caused the plaintiffs injury. f. Is it a case of comparative use in advertising? (Also see fair use) i. Unauthorized comparative advertising use of a competittors trademark will not create liability under 43(a) in the absence of misrepresentations or likelihood of confusion as to source. ii. To challenge a my product is better than yours comparison, plaintiff must prove that the defendants superiority claim is false or misleading. iii. To challenge a tests prove that my product is better than yours claim, plaintiffs must prove only that the tests upon which the claim is based were not sufficiently reliable. iv. Ex. If you like ESTEE LAUDER...Youll love BEAUTY USA. This is okay.

3.

v. see Everready Battery v. Coors Company .Beer company used Leslie Neilson dressed like the Energizer bunny (Coors says it is the worlds fastest growing beer and it keeps growing, growing...). Is this enough to cause confusion, or to cause mistake, or to deceive as to the affiliation, conection, or association of Coors light with Energizer batteries? No. It is a parody. The products also do not overlap. No consumer is likely to mistake Coors as the source of origin for Energizer Batteries. Is it an antitrust violation? a. Two Rules: i. Illegal per se: A restraint must have manifestly anticompetitive effects and lack any redeeming virtue. ii. Rule of Reason: Most violations are looked under the rule of reason. Court will look at why they are doing what they do. Requires consideration of a variety of factors, including market power and the actual effect of the restraint. Standard: Does it unreasonably restrict trade? b. Exclusive Dealing i. A supplier generally has the right to deal only with whom it wishes to deal. As long as it does so independently, it may refuse to deal with anyone. ii. Arangements which restrict the buyers ability to purchase similar products from a competitor are termed exclusive dealing arragements. They are potentially anticompetitive in effect, but they are not per se unlawful. (weighing test) c. Price Controls i. The distributor or manufacturer of a trademarked product does not have the unlimited right to fix the price at which wholesalers or retailers resell that product. Such resale price maintenance may be prohibited under the antitrust laws. ii. The rule against resale price agreements was effectively limited over time for agreements setting maximum resale prices because such agreements do not lessen competition and actually benefit consumers by keeping prices down. c. Tying Agreements i. When a trademark owner forces a customer to purchase a second tied product from the trademark owner or owner-approved source in order to obtain the initial tying product that the customer desires, a court may find that an illegal tying arrangement exists. ii. Market share matters!! iii. Plaintiff must show: (1) tying product may not be obtained unless the tied product is also purchased; (2) tying product and tied product are separate and distinct; (3) tying product possesses sufficient economic power appreciable to restrain competition in the tied market; (4) a not insubstantial amount of commerce is affected by the arrangement. iv. A in appropriate circumstances may successfully defend against an accusation of illegal tying by showing a special justification for the particular tying arrangement in question. d. Territorial Restriction i. Limit the geographical areas in which customers of the trademark owner may market the trademarked product. Two kind of restraints: (1) Vertical (chain of distribution); and (2) horizontal (between competitors). ii. Vertical restraints are analyzed under the rule of reason (a franchisor ordinarily can validly agree to appoint only one franchisee in a territory and can contractually restrict a franchisee to a territory of primary responsibility. e. Price Discrimination. Section 2(a) of the Robinson-Patman Act [15 U.S.C. 13(a)], states: That it shall be unlawful for any person engaged in commerce to discriminate in price between different purchasers of commodities of like grade and qualitywhere the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition f. Remedies Successful assertion of civil antitrust claims can result in injunctive, treble damages, and estoppel for trademark misuse.

Internet-Related Trademark Law

1. Keyword Advertising a. Anyone can buy keywords for search engine use the function of the keywords is to trigger the appearance of sponsored advertisements on the serach results page. These then appear on the top, not within the actually search. Keyword purchasers have to pay the search engine each click on the link and each time their ad comes on top. b. Main concern is whether the use of a trademark as a keyword constitutes trademark use and is actionable under the Lanham Act. c. See Holiday Inns, INC v. 800 Reservation. Holiday Inns phone number was 1-800HOLIDAY which was 1-800-465-4329. However, instead of the O, people put in zero. That number would dial another 1-800 number which made reservations for hotels. Did the other company violate the trademark for the use of their phone number? No. The other company did not use the number. The defendant did not intentionally promote his number and cause confusion. The defendants only engaged in minimal advertisement. The defendants use of a protected mark or their use of a misleading representation is a pre-req to the finding of a Lanham Act violation. There was no use here. ** In a case with the opposite result, the court issued an injunction because the defendants publicity efforts misled the public and not because the defendant activated a 1-800 number that appeared confusingly similar. d. See 1-800 Contacts, INC. v. WHENU.com, INC. 1-800 CONTACTS alleged that the advertisements provided by WhenU, which advertised competitors of 1-800 CONTACTS (such as Vision Direct) when people viewed the company's web site, were "inherently deceptive" and that one of the advertisements "misleads users into falsely believing the pop-up advertisements supplied by WhenU are in actuality advertisements authorized by and originating with the underlying Web site. Court found that WhenU did not use the mark as defined in the Latham Act to call for infringement. The ads had absolutely no tangible effect on the appearance or functionality of the website. e. See Rescuecom v. Google. When a Google user launches a search for the term Rescuecom because the searcher wishes to purchase Rescuecoms services, links to websites of its competitors will appear on the searchers screen in a manner likely to case the searcher to believe mistakenly that a competitors advertisement is sponsored by, endorsed by, or affiliated with Rescuecom. Here, Google is selling to its advertisers is Rescuecoms trademark so that they will make money. Thus Google uses and sells Rescuecoms mark in the sale...of Googles advertising services...rendered in commerce. (distinguished from 1-800 Contacts, saying that google made direct use of the mark here, and WhenU didntinstead, ads were triggered by 1-800s mark) 2. Is it a case of initial interest confusion? a. See Grotarian, Helfferich, Schulz, Etc. v. Steinway and Sons. Steinway claims that whoever is buying a Grotarian-Steinweg thinks that they might be buying a Steinway. Holding: Actual or potential confusion at the time of purchase does not necessarily have to demonstrated to establish trademark infringement under the circumstances of this case. G-S would attract potential customers based on the reputation built by Seinway, and those customers might think that the two companies have a connection. b. See Brookfield v. Westcoast. Brookfield owns MOVIEBUFF trademark, but Westcoast Movies owns www.moviebuff.com. This is a problem for Brookfield. Court used an anology to explain initial interest confusion: Using anothers trademark in ones metatags is much like posting a sign with anothers trademark in front of ones store. Blockbuster, posts a sign on the highway proclaiming "West Coast Video, exit 7" when in fact West Coast Video is at exit 8 and Blockbuster Video is at exit 7. The court explained how customers who take exit 7 looking for West Coast Video are likely to end up renting from Blockbuster once they realize they can not find West Coast Video and they see that Blockbuster is right there. Holding: West Coast cannot use MovieBuff, but can use Movie Buff, which is descriptive, and not fanciful. West coast can use MovieBuff only in comparative advertising. c. See Playboy Enterprises v. Netscape Communications Corp. Netscape used keying for adult entertainment has a list of terms for which to display related ads. This list contains the terms "playboy" and "playmate" which are trademarked by Playboy. Netscape

displays ads for various companies in response to those search terms, which includes Playboy's competitors. Playboy claims that Netscape's use of those terms in its keying technique constitutes trademark infringement. Holding: Keying constitutes initial interest confusion where the search engine uses trademarks in the keying lists to generate banner advertisements and such banner advertisements are not labeled or identified. Consumers may not know that such websites are unaffiliated with the trademark owner. d. See Network Automation v. Advanced System Concepts. In-depth case of LOC factors (pg 772) 3. Does the defendant have a defense of nominative fair use? a. See New Kids on the Block v. News America. Defendants conducted a national poll seeking an answer to the question: which one of the New Kids is the most popular? It had a picture next to it. It also had a 900 number for voting, noting that any profits from the calls will go to charity. Infringement? No. Trademark law recognizes a defense where the mark is used only to describe the goods or services of a party; or their geographical origin. (Fair Use Doctrine) Elements: (1) the product must be one not readily identifiable without use of the mark, (2) only so much of the mark may be used as reasonably necessary to identify product, (3) user must do nothing that would suggest sponsorship or endorsement by mark holder b. See Playboy v. Welles. Ex-playmate has her own website where she claimed that she was Playboy Playmate of the Year 1981. (She did in fact hold that title). Court used the NKOTB test and held that the use of the terms in the headlines and banner advertisements are nominative. The terms in the metatags of her website are nominative. But the terms as used in the wall-paper of the website is not nominative. (Remanded to determine whether trademark law protects the abbreviation PMOY as used in the wallpaper). c. See Toyota/Lexus v. Tabari. Tabari is an auto broker who specializes in facilitating the purchase of Lexus vehicles for their customers. Their business maintained websites such as buy-a-lexus.com. Toyota says it is causing confusion. Defendants claim nominative fair use. Court used the NKOTB test. Here, the court said that although the could have used other words in their domain name to describe their business, the ones chosen were the most efficient way to tell consumers what they do. Also, they only used the mark nominatively, and there were sufficient disclaimers on the website to notify consumers that they were not affiliated with Lexus. 4. Is it a case of cyber squatting? a. See Sportys Farm LLC v. Sportsmans Market i. Anticybersquatting Consumer Protection Act it was passed to protect consumers and American businesses, to promote the growth of online commerce, and to provide clarity in the law for trademark owners by prohibiting the bad-faith and abusive registration of distinctive marks as Internet domain names with the intent to profit from the goodwill associated with such marks. ii. Steps to determine whether defendant is cybersquatting: 1. Determine whether the term is a distinctive or famous and thus entitled to the Anticybersquatting CPA. 2. Whether the domain name sportys.com is identical or confusingly similar to the SPORTYS mark. Apostrophes and spaces are not indistinguishable from the original mark. 3. Did defendant act with a bad faith intent to profit from the mark sportys when it registered the domain name sportys.com. Factors: (1) did defendant have any intellectual property rights in sportys.com at the time it registered for it?; (2) does the domain name consist of the legal name of the party that registered it?; (3) the prior use of the domain name in connection wit the bona fide offering of any goods or services; (4) whether defendant claims it was a noncommercial use or fair use of the mark; (5) plan to enter in direct competition with competitor. a. Domain names and Likelihood of Confusion

i. Lot of people buy domains and do not conduct business on them. It is hard to show confusion in this sense. But if the website is selling merchandise, then likelihood of confusion may be found. ii. Geographical similar domains a legitimate concurrent user still violates the other users rights if it sues the shared mark in a manner that would cause consumer confusion...thus, if a concurrent user registers a domain name with the intent of expanding its use of the shared mark beyond its geographically restricted area, then the domain name is registered in bad faith. b. Gripe Sites. There should be commercial use of the gripe site in order for the ACPA or FTDA to apply. Ex: Lucentsucks.com was found to violate a statute when the website was actually a pornographic website. **Summary of ACPA and UDRPA look at handout given in class.

Jurisdiction WILL NOT BE ON THE EXAM.

1. Within the US a. Trademark cases can be brought in federal or state courts. Most are brought in federal courts, and those involving the federal trademark statute or diversity jurisidcition are removable to fed court. 15 USC 1121 district and territorial courts of the US shall have original jurisdiction. b. Standing: Plaintiff need show only that it has a legitimate commercial interest in the proceedings outcome. c. Subject Matter Jurisdiction. See Coca-Cola Co. v. Stewart. Activity has to occur in commerce. Jurisdiction under the Lanham Act encompasses intrastate activity that substantially affects interstate commerce. In commerce refers to the impact that infringement has on interstate use of a trademark. d. Personal Jurisdiction. Must meet the due process standard of sufficient minimum contact. Court looks for transaction of business by the within the state, with the cause of action relating to that transaction of business. e. American plaintiff suing in US court against where infringing activities occur in another country? See Bulova Factors: (1) does defendants conduct have a substantial effect on US commerce; (2) is defendant a US citizen; 3) is there an absence of conflict with trademark rights established under foreign law? 2. Internet a. Passive site v. Active site 1. Passive site: only giving information; typically not enough for personal jurisdiction. 2. Active site: a site where you can order, correspond, etc.; typically enough for P.J.

Remedies
1. Injunctions a. Qualified prohibitions or requirements respecting trade dress, explanatory language, geographical and other limitations, and other provisions b. Prevents the damage of future confusion, but it will neither compensate for the damages caused by infringement nor further the worthy end of destroying the incentive to infringe. c. Preliminary injunctive relief court must weigh whether the moving party has demonstrated: i. Some likelihood of prevailing on the merits 1. Can the moving party show that it has a better than negligible chance? 2. Can movant establish that he has a protectable trademark 3. Can movant establish that a likelihood of confusion exists between the marks or products of the parties. use the polaroid factors. ii. An inadequate remedy at law and irreparable harm if the injunction does not issue. If this is the case, then: 1. The irreparable harm the nonmovant will suffer if the injunction is grated balanced against the irreparable harm to the movant if relief is denied, 2. The effect granting or denying the injunction will have on nonparties (public interests) d. Sometimes told to take affirmative steps to avoid further damage and deception i. Cybersquatting case transferring domain name to plaintiff

e. 2.

ii. Selling all items a company possesses within a year, etc. Contempt cases: If a defendant attempts to evade the effect of an injunction, a contempt proceeding may then be necessary. Compensatory Damages a. Encompasses injury to the plaintiffs goodwill, plaintiffs expenses in counteracting confusion, and plaintiffs lost profits caused by defendants wrongful acts. b. General purpose is to make plaintiff whole c. Dont need proof of wrongful intent but when it is there it creates a presumption of actual confusion for damage purposes. d. Money for corrective advertising to remedy confusion or repair damage goodwill is often based on a percentage of defendants expenditures. e. Punitive damages not allowed under Lanham Act, but some states f. Profits i. Profits award entitles plaintiff to the defendants profits from sales resulting from the wrongful use of an infringing mark. The defendants sales are presumed to result from the wrongful use unless the defendant proves otherwise, and the gross revenue from sales is considered profit. ii. Issue is it is hard to ascertain what proportion of the profit is due to the trade-mark, and what is due to the intrinsic value of the commodity. iii. An award based on the defendants profits requires proof that the defendant acted willfully or in bad faith. iv. A plaintiff may recover its own lost profits by proving it would have received the profits but for defendants infringement or deception, and that the amount can be determined with a reasonable certainty. g. Attorneys fees: Typically have to show bad faith.