INTELLECTUAL PROPERTY Course Handbook Series Number G-1278 Fundamentals of Trademark Law in the Global Marketplace 2016 Co-Chairs Lynn S. Fruchter Jeffery A. Handelman Anne Hiaring Hocking To order this book, call (800) 260-4PLI or fax us at (800) 321-0093. Ask our Customer Service Department for PLI Order Number 149070, Dept. BAV5. Practising Law Institute 1177 Avenue of the Americas New York, New York 10036
3 Fundamentals of Trademark Law in the Global Marketplace Adam D. Resnick Mosaic Legal Group, PLLC If you find this article helpful, you can learn more about the subject by going to www.pli.edu to view the on demand program or segment for which it was written. 115
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FUNDAMENTALS OF TRADEMARK LAW IN THE GLOBAL MARKETPLACE Practising Law Institute Presented by: Adam D. Resnick Mosaic Legal Group, PLLC Washington, DC aresnick@mosaiclegalgroup.com Date: July 12, 2016 117
What is a Trademark? Trademarks are words, names, symbols, designs, or other distinctive items which serve to identify the source of goods or services and distinguish them from those sold by others. Fundamentals of Trademark Law in the Global Marketplace 2 118
What is a Trademark? Trademarks symbolize goodwill Trademarks are important advertising tools Trademarks aid consumers Trademarks are exclusive rights Fundamentals of Trademark Law in the Global Marketplace 3 119
Items Which Can Serve as Trademarks Words Names Symbols Combinations of words and designs (i.e., logos) Fundamentals of Trademark Law in the Global Marketplace 4 120
Items Which Can Serve as Trademarks Trade dress, e.g., package designs and product configurations Sounds Scents Colors Fundamentals of Trademark Law in the Global Marketplace 5 121
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Types of Marks Trademarks Service marks Certification marks Collective marks Fundamentals of Trademark Law in the Global Marketplace 9 125
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Creation of Trademark Rights Trademark rights can be based on common law, state statute, or the federal Trademark Act of 1946 (as amended), also known as the Lanham Act Federal registration is not a prerequisite for trademark rights, although registration confers key benefits and rights Fundamentals of Trademark Law in the Global Marketplace 14 130
Creation of Trademark Rights Trademark rights can be acquired without registration, under the common law and Section 43(a) of the Lanham Act (which deals with unfair competition), by using a mark in commerce as a trademark However Geographic limitations Lack of federal statutory presumptions and other benefits Fundamentals of Trademark Law in the Global Marketplace 15 131
Creation of Trademark Rights Federal registration after use enhances common law rights already acquired and provides additional rights, such as a nationwide right of priority as of the filing date Contingent trademark rights can be acquired prior to use by filing an application to federally register the mark stating an intent to use the mark Fundamentals of Trademark Law in the Global Marketplace 16 132
Creation of Trademark Rights The filing of the application constitutes constructive use and confers a nationwide right of priority The applicant must have a bona fide intent to use the mark in commerce The application must be followed by use in commerce, unless registration is based on a foreign or International Registration Fundamentals of Trademark Law in the Global Marketplace 17 133
Creation of Trademark Rights Rights based on an intent-to-use application cannot be enforced until the mark is registered, except to block or oppose registration of a later-filed mark Rights are extinguished if the application does not mature to registration, except that any common law use-based rights will remain Fundamentals of Trademark Law in the Global Marketplace 18 134
US Rights Based On Foreign Rights The Paris Convention Trademark rights (and a registration) can be acquired without use by basing a US application on a previously filed foreign application or registration under Section 44 of the Lanham Act, which implements the Paris Convention trademark treaty. A foreign applicant can base a U.S. application on a pending application in a foreign country, provided the U.S. application is filed within six months of the filing of the foreign application. Fundamentals of Trademark Law in the Global Marketplace 19 135
US Rights Based On Foreign Rights The Paris Convention The foreign filing date becomes the effective U.S. filing date, rather than the actual, later U.S. filing date. An application can also be based on a foreign registration that has already issued. In both cases, the application must allege a bona fide intent to use the mark in the U.S., however, no use of the mark in the U.S. is necessary in order for the application to mature into a registration (although it will be vulnerable to later attack on grounds of abandonment and/or nonuse). Fundamentals of Trademark Law in the Global Marketplace 20 136
US Rights Based On Foreign Rights The Madrid Protocol U.S. trademark rights can also be acquired based on an International Registration pursuant to the Madrid Protocol, under Section 66 of the Lanham Act. A foreign applicant can utilize the Madrid Protocol in the United States if the applicant is domiciled in a country which is a member of the Protocol. Fundamentals of Trademark Law in the Global Marketplace 21 137
Determining Priority In general, the first to file a federal trademark application in good faith achieves nationwide priority over all except a prior user in its region of use and anticipated region of expansion. A filing based solely on an intent to use must be perfected via use and registration to maintain and enforce the priority rights. If neither party has filed, and both rely upon the common law, then there will be a comparison of the dates of first use. Fundamentals of Trademark Law in the Global Marketplace 22 138
Determining Priority A filing based on a pending foreign application under the Paris Convention, or on a combination of the Paris Convention and the Madrid Protocol, may achieve a priority date up to six months earlier than the actual U.S. filing date. If the home country or basic application matures into a registration, the applicant does not need to use the mark in the U.S. in order to obtain a U.S. registration. Fundamentals of Trademark Law in the Global Marketplace 23 139
Determining Priority Even if the foreign application does not mature into a registration, if the applicant asserts an additional basis for registration, such as intent-to-use in the U.S., and fulfills that basis, the applicant can drop the foreign basis for the application and the registration will issue with the priority filing date preserved. Fundamentals of Trademark Law in the Global Marketplace 24 140
Determining Priority Example I: Company X files for a mark on January 1, 2016, based on intent to use. Company Y begins using a confusingly similar mark on February 1, 2016. Company X then begins using its mark on March 1, 2016. Who has priority? Fundamentals of Trademark Law in the Global Marketplace 25 141
Determining Priority Company X. However, if, for some reason, X cannot perfect its priority date by getting a registration, then Y will prevail, because it has prior use. Fundamentals of Trademark Law in the Global Marketplace 26 142
Determining Priority Example II: Company X begins using a mark on January 1, 2016, and files an application the same day. Company Y, an Italian company, files an application for a confusingly similar mark on February 1, 2016, based on intent to use, and also based on an application filed in Italy on December 31, 2015. Company Y begins using its mark on January 1, 2016, drops its Italian application as a basis for U.S. registration, and now seeks a U.S. registration based solely on use. Who has priority? Fundamentals of Trademark Law in the Global Marketplace 27 143
Determining Priority Company Y, by one day. The Paris Convention affords Y a constructive U.S. filing date of December 31, 2015, based on the Italian filing date. Even though Y eventually dropped the Convention as a basis for U.S. registration, the priority date survives. Serious implications when evaluating trademark clearance searches Fundamentals of Trademark Law in the Global Marketplace 28 144
Trademark Protection Under State Law Common Law Registration Fundamentals of Trademark Law in the Global Marketplace 29 145
Trademark Protection in Foreign Countries Trademark rights are territorial No single international protection or registration system Each system has its own laws and registration system In most countries, unlike the U.S., rights are heavily dependent upon registration, and use prior to registration is not required Fundamentals of Trademark Law in the Global Marketplace 30 146
Trademark Protection in Foreign Countries Paris Convention Madrid Protocol, Madrid Agreement European Union EUTM system Fundamentals of Trademark Law in the Global Marketplace 31 147
Benefits of Federal Registration Nationwide right of priority as of the application filing date Constructive notice of trademark rights as of the registration date Registration certificate is evidence of the registrant s rights Incontestability Fundamentals of Trademark Law in the Global Marketplace 32 148
Benefits of Federal Registration Use of the symbol Blocks importation of goods bearing infringing/counterfeit trademarks via recordation with the U.S. Customs Service Basis for foreign registration under the Paris Convention and the Madrid Protocol Fundamentals of Trademark Law in the Global Marketplace 33 149
Strength of Marks: The Spectrum of Distinctiveness Coined or fanciful marks Arbitrary marks Suggestive marks Descriptive marks Can be protected upon acquisition of distinctiveness Generic terms Fundamentals of Trademark Law in the Global Marketplace 34 150
Strength of Marks: The Spectrum of Distinctiveness Acquisition of distinctiveness ( secondary meaning ) for descriptive marks via use and promotion Presumption of distinctiveness if used substantially exclusively and continuously for five years - Lanham Act Section 2(f) Distinctiveness can be acquired earlier in certain cases Declarations as to use, promotion, advertising, sales, website hits, etc. Consumer declarations Recognition in press Ability to date the acquisition of distinctiveness can be critical in priority battles Rights may be geographically limited if only common law-based Fundamentals of Trademark Law in the Global Marketplace 35 151
Product Configurations and Trade Dress Must be distinctive and nonfunctional A design feature is functional if it has a utilitarian purpose, i.e., a purpose other than to identify the source of the item. Under two key Supreme Court cases in this area, if the trade dress is the configuration of the product itself: The claimant must show that is has acquired distinctiveness. It cannot be considered inherently distinctive. If the design feature was once the subject of a utility patent, there will be a strong presumption that the feature is functional and not protectable trade dress. Fundamentals of Trademark Law in the Global Marketplace 36 152
Special Trademark Species Colors Sounds Scents Internet Domain Names Prone to infringement problems because names confusingly similar to trademarks are not automatically blocked Problem is likely to be exacerbated due to newly introduced gtlds Fundamentals of Trademark Law in the Global Marketplace 37 153
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Trademark Conflicts Infringement occurs when someone uses a name or mark which is so similar to the trademark of a senior trademark owner for related goods so as to cause a likelihood of confusion, mistake or deception as to the source of goods or services Fundamentals of Trademark Law in the Global Marketplace 48 164
Trademark Conflicts Actionable in: The U.S. Patent and Trademark Office The Courts ADR For internet domain names: The Uniform Domain Name Dispute Resolution Policy (UDRP) of the Internet Corporation for Assigned Names and Numbers (ICANN) Fundamentals of Trademark Law in the Global Marketplace 49 165
Trademark Conflicts Likelihood of Confusion Factors Similarity of Marks Strength of Marks Relatedness of Goods or Services Channels of Trade Fundamentals of Trademark Law in the Global Marketplace 50 166
Trademark Conflicts Likelihood of Confusion Factors Type of Consumers Cost of Goods or Services Intent Actual Confusion Fundamentals of Trademark Law in the Global Marketplace 51 167
Dilution of famous marks is actionable Famous trademarks are protected from dilution (weakening) under Section 43(c) of the Lanham Act (this section was substantially overhauled in October, 2006) The meaning of dilution: Dilution by blurring Dilution by tarnishment Relief is available if there is a likelihood of dilution of the plaintiff s mark A likelihood of confusion need not be shown Fundamentals of Trademark Law in the Global Marketplace 52 168
Dilution of famous marks is actionable The mark must be famous to qualify Fame means widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark s owner Factors for determining fame are listed in the statute Federal registration not required (but helpful) Fundamentals of Trademark Law in the Global Marketplace 53 169
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Dilution of famous marks is actionable Injunctive relief available; damages available only if willfulness is proved USPTO will deny or cancel registration of a mark likely to cause dilution of a famous mark upon successful challenge by the owner of the famous mark in an opposition or cancellation proceeding. Fair use, use in news reporting or commentary, and noncommercial use of a famous mark are not actionable Fundamentals of Trademark Law in the Global Marketplace 59 175
Dilution of famous marks is actionable State dilution statutes Available in approximately 38 states State registration usually not required Distinctiveness usually required, but fame required in only about 12 states Fundamentals of Trademark Law in the Global Marketplace 60 176
Loss of Trademark Rights Duration of rights Abandonment Failure to prosecute infringers Licensing without quality control Genericide e.g., ASPIRIN (Bayer AG), ESCALATOR (Otis Elevator), THERMOS (Thermos GmbH), YO-YO (Duncan Yo-Yo), and others. Fundamentals of Trademark Law in the Global Marketplace 61 177
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