Trademark: right appurtenant to an established business or trade in connection with which the mark is employed. Law of trademarks: a part of the broader law of unfair competition; the right to a particular mark grows out of its use, not its mere adoption; its function is simply to designate the goods as the product of a particular trader and to protect his good will against the sale of another's product as his; and it is not the subject of property except In connection with an existing business.Federal jurisdiction: Property in trademarks and the right to their exclusive use rest upon the laws of the several states, and depend upon them for security and protection; the power of Congress to legislate on the subject being only such as arises from the authority to regulate commerce with foreign nations and among the several states and with the Indian tribes.

A. The Spectrum of Trademark Distinctivenessa. Determining whether a trademark is suggestive or descriptive is hard to articulate (9th Circuit). Look COPPERTONE for suntan oil - SuggestiveDUTCH BOY for paints - ArbitraryGREYHOUND for bus service-SuggestivePARK N FLY for airport parking lots - DescriptiveBLUE DIAMOND for nuts - ArbitraryREEBOK for shoes - FancifulROACH MOTEL for insect traps - Suggestive

INS v. A.P. broad idea of preventing one from “reaping where one has not sown” is presented here as news passed as their own were being copied from the other agency. This was a property and a Copyright case; not a trademarks case. Dastar Corp. v. Twentieth Century Fox : strengthens the rights to make use of works in the public domain. As claims based on trademark, can’t make it impractical to use works in the public domain as intended by Article One of the United States Constitution.

Passing off and Reverse passing off are trademark cases of unfair competition. Trademark(both)/copyright and patent (fully Federal )

The Lanhma Act was intended to make “actionable the deceptive and misleading use of marks” and “to protect persons engaged in … commerce against unfair competition.”As originally enacted § 43 (a) would be concerned with the geographic location in which the good originated. However, the courts interpreted to include the origin of source or manufacture. In the Trademark Revision Act of 1988 made clear that §43 (a) covers origin of production as well as geographic origin.

Federal courts have original jurisdiction over actions arising under the Lanham Act. In the absence of federal registration, state law controls infringement and unfair competition claims. Ownership of a mark requires a combination of both appropriation and use in trade. (neither conception of the mark, nor advertising alone establishes trademark rights at common law) trademark ownership comes when goods bearing the mark are placed on the market. The exclusive right to a trademark belongs to one who first uses it in connection with specified goods (even a single [good-faith –not an undisclosed internal sale ] use in trade may sustain trademark rights if followed by continuous commercial utilization.) While goods may be identified by more than one trademark, the use of each mark must be bona fide. Mere adoption of a mark without bona fide use, in an attempt to reserve it for the future, will not create trademark rights. (Blue Bell, Inc. v. Farah MFG Co)

Federal registration: Federal law permits the registration of trademarks and the enforcement of registered marks. it also indirectly allows the enforcement of unregistered marks. Under the common law, one must win the race to the marketplace to establish the exclusive right to a mark. Registration modifies this system slightly, allowing slight sales plus notice in the register to substitute for substantial sales without notice.’ Intent to use a mark, like a naked registration, establishes no rights at all.

Intent to use a mark, like a naked registration, establishes no rights at all. Registration+ slight sales is enough. (Zazu Designs v L’oreal, S.A) Under the common law, one must win the race to the marketplace

to establish the exclusive right to a mark. Registration modifies this system slightly, allowing slight sales plus notice in the register to substitute for substantial sales without notice. (by itself registration only establishes a rebuttable presumption of use as of the filing date.)Analogous Use- in a contest between first distributor and first advertiser of confusingly similar products, the first to foster an association in consumers’ minds between the goods and the source will win.(Fact dependent analysis) (Maryland Stadium Authority v. Becker ) A plaintiff has the burden to show secondary meaning in the defendant's trade area, and prior to the time the defendant entered the market. However, (Intentional copying of a mark raises a presumption of likelihood of confusion just as it raises a presumption of secondary meaning). (Maryland Stadium Authority v. Becker ) Federal Resistration and the Intent to Use Alternative- an ITU is an alternative to the “use” application. After the review by the PTO, the applicant receives a notice of allowance which allows an initial 6 month window in which to begin use and file a statement of use. There may be up to 5 6-month extensions. Although the ITU and the notice of allowance create no substantive rights, once the applicant files the statement of use, the PTO will issue a certificate of registration and give the applicant constructive use of, and hence priority in, her mark from the date that she filed her ITU application. The Geographic Scope of Trademark Right- Because a party may began use after another filed an ITU application and then sue to have the applicant enjoined from using the mar (eliminating any chance to file a statement of use and obtain a registration certificate), a temporary injunction ought not to be used to give final relief before trial. Neither should it permit one party to obtain an advantage by acting, while the hands of the adverse party are tied by the writ. (Warner vision Entertainment, Inc. v Empire of Carolina, Inc. leading case)The common law approach (geo. scope) In case of good-faith use of unregistered trademarks by more than one party, both get to use the trademark in their locations and cannot enjoy the other. It becomes a race to get to the other states first. (United Drug CO. v. Theodore Rectanus Co.) Because of its nature, an owner of a trademark may not, like the proprietor of a patented invention, make a negative and merely prohibitive use of it as a monopoly. (In the ordinary case of parties competing under the same trademark in the same market, it is correct to say that prior appropriation settles the question. But where two parties independently are employing the same mark upon goods of the same class, but in separate markets wholly remote the one from the other, the question of prior appropriation is legally insignificant, unless at least it appear that the second adopter has selected the mark with some design inimical to the interests of the first user, such as to take the benefit of the reputation of his goods, to forestall the extension of his trade, or the like. ) Territoriality issue: Registration acts as constructive notice of a trademark (regardless of the territorial areas in which the registrant actually uses the mark.). If one company uses a mark in a location that is the same as a user in another location, then one company registers it federally, then the other company can still use the mark in the same location as before the registration but cannot move into a new location because they are on constructive notice of the mark’s registration. Dawn Donut CO. v. Hart’s Foods Stores, Inc. (doomed by Circ. City) Ownership of a trademark is established by use, not by registration. The Senior is entitled to enjoin junior users from using the mark, or one that is deceptively similar to it, subject to limits imposed by senior user’s market and natural area of expansion.” (Dawn Donut Co. v. Hart’s Food Stores, Inc-2nd Cir. 1959 ) (owner of mark not able to enjoin its use by others in area where owner not likely to expand). The purpose of the law of trademark infringement is not to afford relief against unfair business conduct in vacuo; it is designed solely to prevent unfair competition and a Jr. user in a far market is not a threat (possibility of a remote future injury) that the court should enjoin :S (Holiday Inn v. B&b Corp. )No particular finding of likelihood of entry or irreparable harm is necessary for injunctive relief in trademark infringement or unfair competition cases. Irreparable injury ordinarily follows when a likelihood of confusion or possible risk to reputation appears from infringement or unfair competition. Thus, a court need only find that a defendant is liable for infringement or unfair competition for it to award injunctive relief. The Sixth Circuit has an eight point test for infringement liability under the Lanham Act. Likelihood of entry is just one of the eight factors under this test, and it is not dispositive of liability. A finding that the parties will not expand their markets significantly does not address the ultimate issue of likelihood of confusion. (Circuit City v. CarMax Inc.- 6 th Circ. 1999)

The Dawn Donut rule validated the concept of geographically distinct markets and the innocent second user of a mark. In 1959 (when Dawn Donut was decided), that ruling had reasonable validity. Circuit City now sees expansion into the market as only one of the elements to generate likelihood of confusion.

Abandonment: The Lanham Act (Act) places an affirmative duty upon a licensor of a registered trademark to take reasonable measures to detect and prevent misleading uses of his mark by his licensees or suffer cancellation of his federal registration. 15 U.S.C.S. § 1064 of the Act provides that a trademark registration may be cancelled because the trademark has been abandoned. And abandoned is defined in 15 U.S.C.S. § 1127 to include any act or omission by the registrant which causes the trademark to lose its significance as an indication of origin. Controlled licensing does not amount to an abandonment of the licensor's registration, while a system of naked licensing does.

Gray-market products: are those that are legitimate using the trademark in another country and they are then brought legally to the United States bearing the same trademark as they would in the United States. Price discrimination allows imports to come at a lower price than the same product in the U.S. Under exception of § 133.21(c)(3), (permitting importation of gray-market goods where articles of foreign manufacture bore a trademark applied under authorization of the U.S. owner), was in conflict with the plain language of the statute and invalid. (K Mart Corp. v. Cartier Inc.)If the foreign product elaborated overseas is substantially different form the product manufactured and marketed in the U.S., regardless of the product being genuine, its importation is barred. (Lever Bros. CO. v. United States). Section 42 of the Lanham Act disregards the trademark's genuine character abroad or affiliation between the producing firms and focuses on whether it represents the goodwill in the U.S.

The threshold issue in any action for trademark infringement is whether the word or phrase is initially registerable or protectable. (Zatarins, In. v. Oak Grove Smokehouse, Inc.)

A potential trademark may be classified as generic, descriptive, suggestive, or arbitrary or fanciful. A generic term connotes the "basic nature of articles or services" rather than the more individualized characteristics of a particular product. Generic terms can never attain trademark protection . If at any time a registered trademark becomes generic as to a particular product or service, the mark's registration is subject to cancellation. -Where a term is generic, the original maker of the product acquires no exclusive right to use it. (shredded wheat) (Kellogg Co. v. National Biscuit Co.) A descriptive term identifies a characteristic or quality of an article or service, such as its color, odor, function, dimensions, or ingredients. Descriptive terms ordinarily are not protectable as trademarks. They may become valid marks, however, by acquiring a secondary meaning in the minds of the consuming public. While a descriptive term may be elevated to trademark status with proof of secondary meaning, a generic term may never achieve trademark protection. A suggestive term indirectly alludes to a quality of the product. Exs: PLAYBOY for a men's magazine, 7-11 for a store that was open from 7 a.m. to 11 p.mArbitrary or fanciful terms bear no relationship to the products or services to which they are applied. Like suggestive terms, arbitrary and fanciful marks are protectable without proof of secondary meaning.

Secondary meaning occurs when customers come to recognize the particular term as having a second meaning, signifying a particular brand. Requires extensive advertising over long period of time. TThe burden of proof rests with the party seeking to establish legal protection for the mark, the plaintiff in an infringement suit. Descriptiveness tests: 1. The dictionary definition of the word is an appropriate and relevant indication of the ordinary significance and meaning of words to the public. 2. The "imagination test" is a second standard used by the courts to identify descriptive terms (seeks to measure the relationship between the actual words of the mark and the product to which they are applied. If a term requires imagination, thought and perception to reach a conclusion as to the nature of goods, it is considered a suggestive term. Alternatively, a term is descriptive if standing alone it conveys information as to the characteristics of the product.)3. Whether competitors would be likely to need the terms used in the trademark in describing their products. 4. Final barometer of the descriptiveness of a particular term examines the extent to which a term actually has been used by others marketing a similar service or product. (When companies from A to Z select the same term to describe their similar products, the term in question is

most likely a descriptive one.) Survey evidence is the most direct and persuasive way of establishing secondary meaning.Fair use defense: The "fair use" defense applies only to descriptive terms and requires that the term be used fairly and in good faith only to describe to users the goods or services of such party, or their geographic origin. Although a trademark is valid by virtue of having acquired a secondary meaning, only that penumbra or fringe of secondary meaning is given legal protection. The Supreme Court said there is fair-use even if causes confusion. (Mak-Up, Inc. v. Lasting Impression, Inc.)

Cancellation occurs at any time a registered trademark becomes generic as to a particular product or service.

There is a presumption in favor of a registered trademark, and the burden of proof is upon one who attacks the mark as generic, but the presumption can be overcome by a showing by a preponderance of the evidence that the term was or has become generic. A word used as a trademark is not generic if the primary significance of the term in the minds of the consuming public is not the product but the producer. (Anti-Monopoly, Inc v. General Mills) Public tests: There were 3 surveys (Teflon, which was defective as it required the pubic to make a legal determination) (Thermos, which was defective as it narrowed the question too much and lead to an answer) (The motivation survey, which proved only 32% want monopoly for its connection to Parker Brothers) and (The tide survey, which was also irrelevant for being too narrow).

A term is merely descriptive if it specifically describes a characteristic or an ingredient of a product, however, by acquiring secondary meaning(association with producer not product), such a term can become a valid trademark. 15 U.S.C.S. § 1052(f). However, 15 U.S.C.S. § 1115(b)(4) provides a fair use defense against valid trademarks when the term is not being used as a trademark by the party charged with infringement and is used in good faith to describe the product to its consumers. (Diet Chocolate Fudge Soda Case)When a producer creates a new product that differs from an established product class in a particular characteristic, the law of trademark will not grant the producer the exclusive right to label its product with words that are necessary to describe that new characteristic. (Honey Brown Ale) (Genesee Brewing CO. v. Stroh Brewing Co.) The "primary significance test" is the law of the land. Under this familiar test, a plaintiff seeking to establish a valid trademark must show that the primary significance of the term in the minds of the consuming public is not the product but the producer. To satisfy this requirement, a trademark need not only and exclusively indicate the producer (the "source"), but may, instead, serve a dual function, that of identifying a product while at the same time indicating its source. A mark is not generic merely because it has some significance to the public as an indication of the nature or class of an article. In order to become generic the principal significance of the word must be its indication of the nature or class of an article, rather than an indication of its origin. The "primary significance" does not tell the court how to deal with situations in which, while a term signifies a product that emanates from a single source, that term is needed also to designate not only a product brand but also a product genus.Nonfucntional: To be a valid trademark, a mark must not only be source-denoting, but it must also be nonfunctional. Genericness: the availability of alternative means of describing the product does not automatically preclude a finding that a trademark is generic. But the inverse proposition, that the lack of alternatives will render a mark generic, must be true, at least where a producer who has introduced a product that differs from an established class in one significant way attempts to trademark the only effective means of conveying that distinction+ unfair competition prong. To recover for unfair competition, a plaintiff must show: 1) an association of origin by the consumer between the mark and the first user, that is, secondary meaning; and 2) a likelihood of consumer confusion when the mark is applied to the second user's good. (defendant will, nonetheless, escape liability if it has used every reasonable means to prevent confusion as to the source of the products)

Personal names can serve as trademarks; however, it is treated as a descriptive mark that can be protected only upon a showing of secondary meaning (i.e. McDonald’s). By themselves names are not protected because (1) there is a right (limited) to use your own name (2) some names are too common to distinguish a good and (3) there is a need for information “who is the owner, etc…” The "rule" that

personal names are not protected as trademarks until they acquire secondary meaning does not apply if the public is unlikely to understand the name as a personal name. (Peaceable Planet, Inc. v. TY , Inc.)

Deceptive Marks that convey materially false Information (deceptive matter) within the meaning under § 2(a) of the Lanham Act, arebared from registration. That a mark or part of a mark may be inapt or misdescriptive as applied to an applicant's goods does not make it deceptive. The standard for determining deceptive matter is (1) whether the term is misdescriptive of the character, quality, function, composition or use of the goods; (2) if so, are prospective purchasers likely to believe that the misdescription actually describes the goods; (3) If so, is the misdescription likely to affect the decision to purchase. (In Re Budge MFG. Co.., Inc.)

LAMB contains deceptive matter and thus, is barred from registration and cannot acquire distinctiveness.

In Re California Innovations, Inc.

NAFTA, obliterated the distinction between geographically deceptive marks and primarily geographically deceptively misdescriptive marks. The test for rejecting a deceptively misdescriptive mark was no longer simple lack of distinctiveness, but the higher showing of deceptiveness. Thus, due to the NAFTA changes in the Lanham Act, the PTO could deny registration under § 1052(e)(3)only if (1) the primary significance of the mark was a generally known geographic location, (2) the consuming public was likely to believe the place identified by the mark indicated the origin of the goods bearing the mark, when in fact the goods did not come from that place, and (3) the misrepresentation was a material factor in the consumer's decision. Under the first prong of the test for denying registration under 15 U.S.C.S. § 1052(e)(3) - whether the mark's primary significance is a generally known geographic location - a composite mark must be evaluated as a whole. It is not erroneous, however, for the examiner to consider the significance of each element within the composite mark in the course of evaluating the mark as a whole.

Cancellation of a trademark -the registrant in a cancellation proceeding is entitled to the prima facie presumption that the registration and the mark are valid, that registrant is the owner and that registrant has the exclusive right to use the mark. Thus, cancellation of a valuable registration around which a valuable business good will has been built, should be granted only with due caution and after a most careful study of all the facts. (Pro-Football, Inc. v. HARJO)

Presumptions of validity, Federal Registration, Incontestability, distinctiveness and limited defenses: A certificate of registration provides “prima facie evidence of the validity of the registered mark, of the registrant’s ownership of the mark, and the registrant exclusive right to use the registered mark in commerce or in connection with the goods or services specified in the certificate.” However, the certificate shall not preclude another person from providing any legal or equitable defense or defect which might have been asserted if such mark had not been registered.” Nevertheless, by providing prima facie evidence of validity, ownership and the right to use, the registration shifts the burden of production to the party challenging the registered mark. Moreover, once a mark has been registered for five years, stronger evidentiary presumptions are available. (At that point a trademark owner can obtain an incontestable right to use the registered mark by filing a section 15 affidavit and verifying that the registered mark has been in continuous use for five consecutive years after the registration and that it is still in use in commerce. If the PTO accepts the affidavit, the registrant’s right to use the mark becomes incontestable and its registration becomes conclusive evidence of the validity of the registered mark of the registrant’s ownership of the mark and of the registrant’s exclusive right to use the trademark in commerce…

Such conclusive evidence of the right to use the registered mark shall be subject to proof of infringement and subject to the defenses in section33(b):The mark was obtained fraudulently or abandoned or being g used with permission or that it is functional or the use constitutes fair use. These are still available as a defense even to infringement of an incontestably registered trademark and NO incontestable right shall be acquired in a generic mark that is the generic name for the goods or services for which it is registered. (§33(b) Lanham Act)An incontestable mark cannot be challenged on the grounds that it is merely descriptive. (Parties opposed to the registration had an opportunity to challenge the registration and even the registered mark for 5 years.) (Park’n Fly, Inc. v. Dollar Park and Fly Inc). (Dissenting: “A mark must perform the function of distinguishing the producer or provider of a good or service in order to have any legitimate claim to protection.” Marks registered in violation of an unambiguous statute should not be able to “rely on incontestability to enjoin infringement.) Dis- J. Stevens Park’n Fly, Inc. v. Dollar Park and Fly Inc).

The Protection of “Trade Dress”- this legal term of art generally refers to characteristics of the visual appearance of a product or its packaging (or even the design of a building) that signify the source of the product to consumers. To gain registration in the Principal Register or common law protection under the Lanham Act, a trade dress must not be “functional” and it must have acquired secondary meaning (be “distinctive in a way consumers perceive a particular trade dress as identifying a source of a product).

A trade-mark may consist of a name, symbol, figure, letter, form, or device, if adopted and used by a manufacturer or merchant in order to designate his goods and to distinguish the same from those manufactured or sold by another, to inform the market and enable him to secure profits as result from his reputation for skill, industry, and fidelity.(McLean v. Flemin-1878).Trade dress is not protectable when it has functional characteristics (pillow shape) which the competitors will want to copy for reasons beyond the association with the other manufacturer. (Kellogg Co. v. National Biscuit Co.) Sharing in the goodwill of an article unprotected by patent or trade-mark is the exercise of a right possessed by all--and in the free exercise of which the consuming public is deeply interested. (Kellogg Co. v. National Biscuit Co.-J. Louis D. Brandeis).Competitors using that shape are not obligated to make sure that every consumer knows it is the manufacturer, but to use every reasonable means to prevent confusion. The doctrine of trade dress "secondary" meaning presupposes that the appearance of the article has become associated in the public mind with the first comer as manufacturer or source, and, if a second comer imitates the article exactly, that the public will believe his goods have come from the first, and will buy, in part, at least, because of that deception. A defendant has as much right to copy the "nonfunctional" features of an article as any others, so long as they have not become associated with the plaintiff as manufacturer or source. The critical question of fact at the outset always is whether the public is moved in any degree to buy the article because of its source and what are the features by which it distinguishes that source. Unless the plaintiff can answer this question he can take no step forward; no degree of imitation of details is actionable in its absence. (Crescent Tool CO. v. Kilborn & Bishop CO.) Also, d efacto secondary meaning might not be attainable during a period of monopoly as there are no other options to test whether the features are linked to the product or the producer.

The preemption of state law protection of trade dress - a State could not, consistently with the Supremacy Clause of the Constitution, extend the life of a patent beyond its expiration date or give a patent on an article which lacked the level of invention required for federal patents. Because of the federal patent laws a State may not, when the article is unpatented and uncopyrighted, prohibit the copying of the article itself or award damages for such copying. (Sears, Roebuck & Co. v. Stiffel Co.)While the federal patent laws prevent a state from prohibiting the copying and selling of unpatented articles, they do not stand in the way of state law, statutory or decisional, which requires those who make and sell copies to take precautions to identify their products as their own (That an article copied from an unpatented article could be made in some other way, that the design is "nonfunctional" and not essential to the use of either article, that the configuration of the article copied may have a "secondary meaning" which identifies the maker to the trade, or that there may be "confusion" among purchasers as to which article is which or as to who is the maker, may be relevant evidence in applying a state's law requiring such precautions as labeling; however, and regardless of the copier's motives, neither these facts nor any others can furnish a basis for imposing liability for or prohibiting the actual acts of copying and selling. (Compco Corp. v. Day-Brite Lighting, Inc.) Sears and Compco have never been expressly overruled, they are seldom treated as controlling today and, indeed, are often ignored entirely.

After these decisions (Sears and Compco) the Court moved to a more protectionist approach (decision upholding a FL statute that protects boat designs from being copied through -plug molding) (Bonito Boats, Inc. v. Thunder Craft Boats, Inc). The Rise of Federal Trade Dress Claims - Difference between the Secondary register and the Principal register. The Principal register only allows the registration of Marks that are not descriptive or that acquired secondary meaning. The secondary register only requires that the mark could identify your product, but it does not afford much protection (It does allow for U.S. registration when it is a pre-requisite for registration abroad). If said mark acquires secondary meaning the mark can migrate form the secondary register to the principal register. The Haig & Haig pinch bottle made it to the Principal register for its distinctive design that added no utility but was clearly distinctive of Haig & Haig. After this event, many other companies started protecting the trade dress of their products. Distinctiveness: This is the required characteristic for a trade dress to be protectable. Functionality: This characteristic will not allow a product to gain protection for its trade dress or mark. Any functional characteristic must be open to all so competitors can offer a competing item. (Congress modified the act to assure functional marks are NOT protected).

In the Two pesos case, there was no indication of costumer confusion (the case is worrisome; fortunately the copy was so close to set the case apart.)Inherently distinctive trade dress is protectable without proof of secondary meaning (not required to prevail on a claim under § 43(a)). In this case the product would be Mexican food and the general ambiance would be the packaging (trade dress) of the “product”. (Two pesos, Inc v. Taco Cabana, Inc.) The design is legally functional, and thus unprotectible, if it is one of a limited number of equally efficient options available to competitors and free competition would be unduly hindered by according the design trademark protection. (Taco cabana did not need the exact same design to be able to compete, thus the trade dress is not fuctional).

Qualitex Co. V. Jacobson Prods. Co. A color can serve as a trademark. It is the source-distinguishing ability of a mark -- not its ontological status as color, shape, fragrance, word, or sign -- that permits it to serve the basic purposes of trademark law. A product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article or if it affects the cost or quality of the article, that is, if exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage. Test of aesthetic functionality: would recognition of trademark rights significantly hinder competition. If a design's aesthetic value lies in its ability to confer a significant benefit that cannot practically be duplicated by the use of alternative designs, then the design is "functional."

In an action for infringement of unregistered trade dress under the Lanham Act, 15 U.S.C.S. § 1125(a), a product's design is distinctive, and therefore protectable, only upon a showing of secondary meaning. (Product design cannot be protected under §43 (a) without a showing of secondary meaning.) (Wal-Mart Stores v. Samara Bros.) Product design cannot be distinctive and is not protectable without acquiring secondary meaning. There can be an inherently distinctive packaging (two pesos) and that a color can also be inherently distinctive (Qualitex). However, the court states that product design is different from product packaging, but in order to avoid just calling a restaurant the packaging of a taco, the court labeled it a “some tertium quid that is akin to product packaging and has no bearing on the present case” . Protection for trade dress exists to promote competition and must subsist with the recognition that in many instances there is no prohibition against copying goods and products. In

Functionality of trade dress - A utility patent is strong evidence that the features therein claimed are functional. Where the expired patent claimed the features in question, one who seeks to establish trade dress protection must carry the heavy burden of showing that the feature is not functional, for instance by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device. (TRAFFIX Devices, Inc. v. Marketing Displays). In general terms, a product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article or if it affects the cost or quality of the article (a functional feature is one the exclusive use of which would put competitors at a significant

non-reputation-related disadvantage) The SCourt rejected the competitive necessity test, however, the court does not indicate that copying a patent makes the trade dress functional nor explains what would happen with design options that do not add significant cost or affect the quality of the Product. What about Qualitex (which is good for alternatives that cost no more $)?Traffix and Morton Norwich explanation: The Norwich court allow the board to assess the effect on competition, i.e., to focus on the availability of other alternatives. This is in sharp contrast with the decision in Traffix where the SC Court decided not to consider the alternative designs. The Federal Circuit in (Norwich) maintains that alternative designs are still proper to consider in determining whether the design is functional. A way of reuniting this decision is to understand Traffix as a sui generis case where there was no realistic way of changing the design (like the facts in shredded wheat ) and thus is different from Traffix. The current law is: We don’t know. It depends on how narrowly Traffix is read. (Qualitex was about secondary meaning not functional features).

Trademark ownershipIt is axiomatic in trademark law that the standard test of ownership is priority of use. To acquire ownership of a trademark it is not enough to have invented the mark first or even to have registered it first; the party claiming ownership must have been the first to actually use the mark in the sale of goods or services. (Basic rule is trademark goes to the first person to use it in commerce). (Sengoku Works Ltd. v. RMC Int’l, Ltd. )When proving ownership of a trademark, federal registration of the mark is prima facie evidence that the registrant is the owner of the mark. Therefore, the registrant is granted a presumption of ownership, dating to the filing date of the application for federal registration, and the challenger must overcome this presumption by a preponderance of the evidence. However, the non-registrant can rebut this presumption by showing that the registrant had not established valid ownership rights in the mark at the time of registration--in other words, if the non-registrant can show that he used the mark in commerce first, then the registration may be invalidated.Disputes arise between a manufacturer and distributor, courts will look first to any agreement between the parties regarding trademark rights. In the absence of an agreement the manufacturer is presumed (rebuttable) to own the trademark. (Equal force to cases involving foreign manufacturers) The presumption in favor of the manufacturer is rebuttable, an exclusive distributor may acquire trademark rights superior to those of the manufacturer. Therefore, the distributor may rebut the presumption in favor of the manufacturer, and courts look to various D-M ownership factors when determining which party has the superior right of ownership, including: (1) which party invented and first affixed the mark onto the product; (2) which party's name appeared with the trademark; (3) which party maintained the quality and uniformity of the product; and (4) with which party the public identified the product and to whom purchasers made complaints. Furthermore, courts will also consider which party possesses the goodwill associated with the product (which party the public believes stands behind the product).

Owning Trademarks by Purchase: Assignments.Assignment of a trademark In Gross.

A trademark is merely a symbol of goodwill and has no independent significance apart from the goodwill that it symbolizes. Therefore, a trademark cannot be sold or assigned apart from the goodwill it symbolizes. (The sale or assignment of a trademark without the goodwill that the mark represents is characterized as in gross and is invalid). Sugar Busters LLC v. Brennan) When a trademark is assigned with the good will to another producer in the same line of trade the trademark is not invalidated. (Rolex to Timex example)Assignments and License-backs: lawyers have developed the practice of assigning the trademark and then having the assignee license the mark back to the assignor.

A trademark owner may grant a license and remain protected provided quality control of the goods and services sold under the trademark by the licensee is maintained. But uncontrolled or naked licensing may result in the trademark ceasing to function as a symbol of quality and controlled source. (Barcamerica Int’l USA Trust v. Tyfield Importers, Inc.) Where the licensor fails to exercise adequate

quality control over the licensee, a court may find that the trademark owner has abandoned the trademark, in which case the owner would be estopped from asserting rights to the trademark. – It would be an involuntary forfeiture of trademark rights (it need not be shown that the trademark owner had any subjective intent to abandon the mark) the proponent of a naked license theory faces a stringent standard of proof because where a trademark owner engages in naked licensing, without any control over the quality of goods produced by the licensee, such a practice is inherently deceptive and constitutes abandonment of any rights to the trademark by the licensor.

A proprietor who temporarily suspends use of a mark can rebut the presumption of abandonment by showing reasonable grounds for the suspension and plans to resume use in the reasonably foreseeable future when the conditions requiring suspension abate. But a proprietor may not protect a mark if he discontinues using it for more than 20 years and has no plans to use or permit its use in the reasonably foreseeable future. A bare assertion of possible future use is not enough. (Silverman v. CBS Inc.)

Generic and store products: Medicine and common pharmacy items have received favorable treatment by the courts. This might be (a) due to the social utility of the practice and (2) the well-established practice of consumers to consider buying a generic which reduces consumer confusion and

Likelihood of confusion and promotional goods Unfair competition is a broader area of the law than statutory trademark infringement. Unfair competition is almost universally regarded as a question of whether the defendant is passing off his goods or services as those of the plaintiff by virtue of substantial similarity between the two, leading to confusion on the part of potential customers. The whole basis of the law of "unfair competition" is that no one shall sell his goods in such a way as to make it appear that they come from some other source. As a general rule, the same facts which would support an action for trademark infringement would also support an action for unfair competition. Boston Prof. Hockey v. Dallas Cap & Emblem MFG., Inc.

Prestige Goods: Post-Sale Confusion. The point of confusion is not only at the point of sale but in commerce and evidence of actual confusion is not limited to purchasers under the 8 Polaroid factors. (Ferrari S.P.A. v. Roberts -6 th Circ. 1991 )

Initial Interest ConfusionDirect competition between the products is not a prerequisite to relief. Confusion, or the likelihood of confusion, not competition, is the real test of trademark infringement. (While it is not necessary to show actual confusion there can be no more positive or substantial proof of the likelihood of confusion than proof of actual confusion) Nevertheless, sufficient likelihood of confusion may be established although likelihood of bridging the gap is not demonstrated. The Lanham Act extends trademark protection to related goods in order to guard against numerous evils in addition to restraints on the possible expansion of the senior user's market, including consumer confusion, tarnishment of the senior user's reputation, and unjust enrichment. (Mobil Oil Corp. v. Pegasus Petroleum Corp. -2 nd Circ. 1987)

Reverse Confusion - While the essence of a direct confusion claim is that a junior user of a mark is said to free-ride on the reputation and good will of the senior user by adopting a similar or identical mark, reverse confusion occurs when the junior user saturates the market with a similar trademark and overwhelms the senior user. The harm flowing from reverse confusion is that the public comes to assume the senior user's products are really the junior user's or that the former has become somehow connected to the latter. The senior user loses the value of the trademark--its product identity, corporate identity, control over its goodwill and reputation, and ability to move into new markets. Reverse confusion protects smaller senior users against larger, more powerful companies who want to use identical or confusingly similar trademarks. Absent reverse confusion, a company with a well-established trade name and with the economic power to advertise extensively would be immunized from suit for a product name taken from a competitor.A senior user may sue to protect his reputation even where the infringer's goods are of top quality. Must use the Polaroid (Lapp) factors should for noncompeting goods. (A & H Sportswear, Inc. v. Victoria’s Secret Store, Inc. As in a direct confusion claim, the ultimate question in a reverse confusion claim is whether there is a likelihood of consumer confusion as to the source or sponsorship of a product

Parody defense to trademark infringement-An intent to parody is an intent to benefit from the original trademark, but such an intent is not necessarily probative of a likelihood of consumer confusion. Where there is no evidence of actual confusion and a jury reasonably concludes that there is no likelihood of confusion because of the differences between the marks, consideration of the remaining factors is unnecessary. However, once considered the factors may weigh in favor of protecting the trademark over the expression. (Anheuser Busch, Inc. v. L & L Wings, Inc.) In a copyright context, the "fair use" doctrine does not entitle a parodist to copy everything needed to create the "best parody;" rather, the parodist may copy only that portion of the protected work necessary to "conjure up the original." A parody creating a likelihood of confusion may be subject to a trademark infringement action. A parody must convey two simultaneous and contradictory messages: that it is the original, but also that it is not the original and is instead a parody. To the extent that it does only the former but not the latter, it is not only a poor parody but also vulnerable under trademark law, since the customer will be confused. ( Anheuser - Busch, Inc. v. Balducci Pubs.)

Liability for contributory infringement-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 contributorily responsible for any harm done as a result of the deceit.Willful blindness is equivalent to actual knowledge for purposes of the Lanham Trademark Act. To be willfully blind, a person must suspect wrongdoing and deliberately fail to investigate. (Hard Rock Café Licensing Corp. v. Concession Servs., Inc.) The "reason to know" part of the standard for contributory liability requires a party (or its agents) to understand what a reasonably prudent person would understand, but it does not impose any duty to seek out and prevent violations.Liability standards: (1) Seller: Strict Liability; (2) Secondary Liability (Flee market manager): willfully blind (not negligence as it has no affirmative duty to take precautions against the sale of counterfits).Dilution can encompass blurring (the "whittling away" of distinctiveness caused by the unauthorized use of a mark on dissimilar products) and tarnishment (likely to injure the business’ reputation)Blurring: whittling away" of distinctiveness caused by the unauthorized use of a mark on dissimilar products.Tarnishment occurs when a defendant uses the same or similar marks in a way that creates an undesirable, unwholesome, or unsavory mental association with the plaintiff's mark. Courts frequently enjoin the "tarnishment" of a mark through association with unsavory goods, persons or services. Tarnishment by association: parody case of “Debbie does Dallas” where the court found tarnishment but no likelihood of confusion which is contrary to the Rolling Stones and LL. Bean which came the other way.

General fame is needed for there to be a claim against someone using the mark in an unrelated line of products. (Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc.)

In-Lexis v. Lexus The dissent (J. Sweet) takes a more niche-focused approach and favors Lexis recognition amongst lawyers and accountants. Sweet factors (concurrence) Like likelihood of confusion, blurring sufficient to constitute dilution requires a case-by-case factual inquiry. A review of the anti-dilution cases in this Circuit indicates that courts have articulated the following factors in considering the likelihood of dilution caused by blurring: 1) similarity of the marks 2) similarity of the products covered by the marks 3) sophistication of consumers 4) predatory intent 5) renown of the senior mark 6) renown of the junior mark

Federal Dilution Claims (§43 (c)): If you have a federal registered trademark you cannot be subject to a state dilution case. The federal test (Polaroid light) leaves 2 of the Sweet factors out (sophistication of the costumers and similarity of the products) . The federal test also leaves out the similarity of the commerce channels point from the original Polaroid factors. Genuine good defense: this defense allows

Dilution (should not use the Sweet factors for dilution-has its own factors)

Only famous and distinctive marks are eligible for protection against dilution. (No requirement for fame is present in trademark and trade dress infringement. With regard to a dilution claim under federal and state law, in order to prove a violation, a plaintiff must show that (1) the mark is famous and distinctive; (2) the defendant is making use of the mark in commerce; (3) the defendant's use began after the mark became famous; and (4) the defendant's use of the mark is likely to cause dilution by blurring or dilution by tarnishment. Jada Toys, Inc. v. Mattel INCWhen the mark is validly registered federally this acts as a complete bar against a dilution claim under state law. Sellers of second hand goods can use the trademark under the Genuine-good defense and advertise the products genuinely (TY INC v. Perryman 7 TH Cir.) producers do not own their aftermarkets and cannot impede sellers in the aftermarket from marketing a trademarked product by virtue of trademark law. Dilution by TarnishmentAlterations, accomplished for the sole purpose of promoting a competing product, are properly found to be within New York's 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. (Deere & Company v. MTD Products, Inc ) Not every alteration will constitute dilution, and more leeway for alterations is appropriate in the context of satiric expression and humorous ads for noncompeting products.

Trade Dress DilutionUnder federal trademark law, a claim of trade dress blurring has to do with the identification of a product, which is not the same concept as the lessening of a product's demand. In determining whether dilution of trade dress has occurred undert43(c), two factors are relevant: the similarity of the marks and the renown of the senior mark. (I.P. Lund Trading Aps v. Kohler Co.)National renown is an important factor in determining whether a mark qualifies as famous under the Federal Trademark Dilution Act of 1995, Dilution of a trademark or trade dress can occur even in the absence of confusion on the part of the public.Parody and Dilution. Successsful parody (CV) might enhance a trademark (LV), but despite being associated with it, does not dilute a trademark as it successfully conveys that it is not. (A sufficiently obvious parody is unlikely to blur the targeted famous mark.) (Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC.)For trademark purposes, a "parody" is defined as a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark's owner. A parody must convey two simultaneous -- and contradictory -- messages: that it is the original, but also that it is not the original and is instead a parody. This second message must not only differentiate the alleged parody from the original but must also communicate some articulable element of satire, ridicule, joking, or amusement. Thus, a parody relies upon a difference from the original mark, presumably a humorous difference, in order to produce its desired effect. A successful parody tends to increase public identification of the famous mark with its source. A sufficiently obvious parody is unlikely to blur the targeted famous mark.

Trademark Defenses/Fair Use.Fair use-geographical areas When the mark is used in a way to identify the geographical origin and does not deceive the public, there is no sanctity in the word as to prevent its being used to tell the truth.Just like with generic names or of those merely descriptive of the article manufactured, geographical names can be used by others without infringing on the Senior users trademark. ( Lackawanna Coal)(Canal Co. v. Clark.-1872) (decided under Federal Common Law –before Earie v. Tompkins-)A generic name, or a name merely descriptive of an article of trade, of its qualities, ingredients, or characteristics, cannot be employed as a trademark and the exclusive use of it cannot be entitled to legal protection. No one prevent others inhabiting the district or dealing in similar articles coming from district, from truthfully using the same designation. It is only when the adoption or imitation of what is claimed to be a trade-mark amounts to a false representation, express or implied, designed or incidental, that there is any title to relief against it.

Fair use defense (§15(b)(4): “That the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark, of the party's individual name in his own business, or of the individual name of anyone in privity with such party, or of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin”

A party raising the statutory affirmative defense od fair use to a claim of a trademark infringement §115(b)(4) does not has a burden to negate any likelihood that the practice complained of will confuse consumers about the origin of the goods or services affected. The court has not decided what would happen to a “fair used defense where likelihood of confusion has been proved. ?(KP Permanent Make-Up, Inc. v. Lasting Impression, Inc.) Some possibility of consumer confusion is compatible with fair use and it is up to the plaintiff to show likelihood of confusion by a preponderance of the evidence.

Descriptive Use and Nominative Fair UseSecond-hand items can bear the mark of the original manufacturer although the goods are inferior to the new ones sold directly by the manufacturer. (Beanie babies case) Renewed items can also use the original trademark as long as they don’t deceive the purchaser into believing the item is brand-new. (Champion Spark Plug Co. v. Sanders) The second-hand dealer gets some advantage from the trade mark. But that is wholly permissible so long as the manufacturer is not identified with the inferior qualities of the product resulting from wear and tear or the reconditioning by the dealer. Full disclosure gives the manufacturer all the protection to which he is entitled. A trademark only gives the right to prohibit the use of it so far as to protect the owner's good will against the sale of another's product as his. When the mark is used in a way that does not deceive the public there is no such sanctity in the word as to prevent its being used to tell the truth.Replicas or immitations -One who copies an unpatented product sold under a trademark may use the trademark in his advertising to identify the product he has copied as long as it does not contain misrepresentations or creates a reasonable likelihood of confusion as to the source, identity or sponsorship of the advertiser’s product. (Smith v. Chanel, Inc.) Use of another's trademark to identify the trademark owner's product in comparative advertising is not prohibited absent misrepresentation regarding the products or confusion as to their source or sponsorship.Nominative Fair Use defense - standard where the defendant uses a trademark to describe the plaintiff's product, rather than its own: the user must use it for (a) a product or service in question must be one not readily identifiable without use of the trademark; (b) only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and (c) the user must do nothing that would suggest sponsorship or endorsement by the trademark holder. (The New Kids on the Block v. News America Publishing, Inc.)Descriptive fair use v. nominative fair use: the legal doctrine provides an affirmative defense to trademark infringement (New Kids 9 th Circ ) by which a person may use the trademark of another as a reference to describe the other product, or to compare it to their own.

Laches, Estoppel, and Acquiescence. Laches- A finding of laches alone ordinarily will not bar the plaintiff's request for injunctive relief in a trademark infringement case( although it typically will foreclose a demand for an accounting or damages) however, where defendant actually relies upon the plaintiff's affirmative act the implied consent is inapplicable and an injunction may not issue . (Conan Properties, Inc. v. Conans Pizza, Inc.)Laches Factors in a Trademark Infringement case: (1)Whether the owner of the mark knew of the infringing use; (2) whether the owner’s delay in challenging the infringement of the mark was inexcusable or unreasonable; and (3) whether the infringing user was unduly prejudiced by the owners delay. (Brittingham v. Jenkins 4th Circ. 1990) The affirmative defense of Laches is not valid when the mark’s owner is only seeking injunctive relief; actual acquiescence must be proven.Progressive encroachment is an offensive countermeasure to the affirmative defenses of laches and acquiescence. It allows the plaintiff to demonstrate that although it might have been justified in bringing suit earlier but did not, certain factors now exist that have prompted it to do so and the delay upon which those defenses are premised is excused. (Kellogg Co. v. Exxon Corp.)Acquiescence-In a trademark infringement case involves a plaintiff's implicit or explicit assurances to the defendant which induces reliance by the defendant. Laches -In a trademark infringement case is

commonly defined as an inexcusable delay that results in prejudice to the defendant (defendant must prove how it will be prejudiced by the plaintiff's unreasonable delay and implicit or explicit assurances.)A defendant's mere awareness of a plaintiff's claim to the same mark neither amounts to passing off nor establishes the bad intent necessary to preclude the availability of the laches defense(plaintiff's burden is heavy) plaintiff must offer something more than mere objective evidence to demonstrate that the defendant employed the allegedly infringing mark with the wrongful intent of capitalizing on its goodwill. Estoppel- To defeat a suit for injunctive relief (laches precludes a plaintiff from recovering damages, it does not bar injunctive relief), a defendant must also prove elements of estoppel, which requires more than a showing of mere silence on the part of the plaintiff; defendant must show that it had been misled by plaintiff through actual misrepresentations, affirmative acts of misconduct, intentional misleading silence, or conduct amounting to virtual abandonment of the trademark. First amendment exception, trademark rights can’t stop another from communicating ideas or expressing points of view as a communicative message; not a source identifier. (Mattel v. MCA Records)Exceptions to the Federal Trademark Dilution Act protects the owner of a famous mark against another person's commercial use of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark. Dilutive uses are prohibited unless they fall within one of the FTDA's three statutory exemptions -“These are uses that, though potentially dilutive, are nevertheless permitted: comparative advertising; news reporting and commentary; and noncommercial.Tittle rule exception- titles of artistic works received a different treatment infringe only if they are (1) relevant to the material and (2) not explicitly misleading (The Cat NOT in the Hat or Barbie’s authorized coloring book – for an unauthorized book). Rogers v. Gimaldi (2 nd 1989)

Trademark Rights on the Internet. E-Confusion Where a sizeable number of consumers who were originally looking for P’s product will simply decide to utilize D’s offerings instead, then D is improperly benefitted from P’s goodwill and has infringed upon P’s trademark. In an E-infringement action the court establishes who is the senior user and goes through the standard eight factor test, to determine whether they consuming public is likely to associate the defendant's product with the plaintiff's. E-infringement = trademark owner is the senior user of the mark and a third party was "using a mark confusingly similar” to the trademark. (Brookfield Comms v. West Coast Enter.- 9th Cir., 1999. The Pierson-v.-Post-style analysis that the first person to grab a site owns it is not followed.For Actionable initial interest confusion initial consumer confusion to be actionable, the confusion (once arriving by confusion to that site) must lead to the purchase of a similar item or of spending time in that site. (Interstellar Starship Services, Ltd. v. Epix, Inc). Tthe three most important Polaroid ((Internet trinity) factors in evaluating a likelihood of confusion are (1) the similarity of the marks, (2) the relatedness of the goods or services, and (3) the parties' simultaneous use of the Web as a marketing channel. Cybersquatting is the Internet version of a land grab. Cybersquatters register well-known brand names as internet domain names to force the rightful owners of the mark to pay for the right to engage in electronic commerce under their own name. Under the Anticybersquatting Consumer Protection §34(d), a cybersquatter is liable to the owner of a protected mark if he has: (1) a bad faith intent to profit from that mark; and (2) registers, traffics in, or uses a domain name that: (2a) in the case of mark that is distinctive …, is identical or confusingly similar to that mark that is distinctive; (2b) in the case of a famous mark…, is identical or confusing similar to or dilutive of that mark. A finding of bad faith is an essential prerequisite to finding an ACPA violation. The ACPA also has a safe-harbor provision: Bad faith “shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was fair use or otherwise lawful.” Registering a domain name is a contractual relation and thus can and does include arbitration clauses. The Internet Corporation for Assigned Names and Numbers ICANN adopted as part of its domain name service the Uniform Dispute Resolution Procedure UCRP provides a lower cost alternative for a trademark owner to recover a domain name corresponding to its trademark. Nonetheless, the now superfluous, ACPA is still valid. Cyber-Griping includes the taking of another’s mark to establish a domain name that critizies the trademark holder. See the palnedparenthood case or the PETA.com case.Noncommercial use of the mark is non-actionable as a trademark infringement but actionable under the ACPA. Court’s must reject infringement -dilution claims if there is no commercial use. (Bosley Medical Institute, Inc. v. Kremer-9 th Cir. 2005) Also, exceptions to another section cannot be exported into another section (43-d) not sharing the same rational.

If the conduct at issue is not motivated by a bad faith interest to profit, the ACPA affords no redress. The crucial elements of bad faith mean an intent to trade on the goodwill of another's mark. (Lucas Nursery & Landscaping, Inc. v. Grosse)The Use of Trademarks in Search Engines-Likelihood of ConfusionIn an Initial interest confusion claim, a defendant's intent to confuse constitutes probative evidence of likely confusion(courts assume that the defendant's intentions were carried out successfully).

Trademark Use: What constitutes trademark use? Is using the trademark to display results, using the mark? must themark be displayed to be considered use of the mark? (Playboy. v. Netscape -9 th Circ. 2004) Concurring judge: If Brookfield holds that use without confusion is iinfringment, then it should be reviewed enbanc.Claim under the Lanham Act = "use in commerce" + an unauthorized use, likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, or as to the origin, sponsorship, or approval of goods or services. The use of a trademark in a software program’s internal directory does not preclude a finding of trademark use. (Rescuecom Corp. v. Google)

RemediesInjunctive Relief (Preliminary and Permanent) A district court may grant a preliminary injunction only if the movant establishes the following: (1) a substantial likelihood of success on the merits of the underlying case, (2) the movant will suffer irreparable harm in the absence of an injunction, (3) the harm suffered by the movant in the absence of an injunction would exceed the harm suffered by the opposing party if the injunction issued, and (4) an injunction would not disserve the public interest.It is generally recognized in trademark infringement cases that there is not an adequate remedy at law to redress infringement (therefore, equitable injection) and that infringement by its nature causes irreparable harm. Monetary Damages and Attorneys’ Fees.

Profits earned by a defendant can be recovered by the mark holder, subject to the principles of equity, from infringement of the mark §35 Lanham Act. The plaintiff has the burden of showing the amount of the defendant's sales of the infringing product. The defendant has the burden of showing all elements of cost and other deductions. A proportionate share of overhead is not deductible when the sales of an infringing product constitute only a small percentage of total sales. Absence of competitors or failure or proof showing diversion of the mark owner's sales is no defense to the claim for defendant's profits. Maltina Corporation v. Cawy Bottling Co.)

Diversion of sales is not a prerequisite to an award of profits, only a factors to be considered and a trial court judge may, in his discretion, award attorney's fees in exceptional cases to the prevailing party – an exceptional case is one in which defendant's trademark infringement can be characterized as malicious, fraudulent, deliberate, or willful. It has been interpreted by courts to require a showing of a high degree of culpability on the part of an infringer, for example, bad faith or fraud. The parties' relative economic positions should not enter into the determination even when an award of punitive damages would serve as an example to deter other infringers. (Texas Pigs Stands, Inc. v. Hard Rock Café International, Inc.)

DamagesThe plaintiff can decide if it get a jury or not by whether it request only an injunction (no jury) or seeks damages (jury).

Profits; damages and costs; attorney feesWhen a violation of any right of the registrant of a mark registered in the PTO, a violation under section 43 (a) or (d) of this title, or a willful violation under section 43 (c ) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all

elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party.

The Special Case of Reverse ConfusionReverse confusion = when the infringer (junior user) saturates the market with a trademark similar or identical to that of a smaller, senior user causing confusion as to the origin of plaintiffs product.finding of fraudulent intent or bad faith is not essential to prove infringement where likelihood of confusion already exists.

A dollar-for-dollar expenditure for corrective advertising is unnecessary to dispel the effects of confusing and misleading advertising a plaintiff's inability to prove with precision that amount necessary to make itself whole does not preclude recovery since the most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created. (Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co.)

The Lanham Act specifically provides for the awarding of profits in the discretion of the judge subject only to principles of equity. The trial court's primary function is to make violations of the Lanham Act unprofitable to the infringing party. Other than general equitable considerations, there is no express requirement that the parties be in direct competition or that the infringer willfully infringe the trade dress to justify an award of profits. Profits are awarded under different rationales including unjust enrichment, deterrence, and compensation. The Lanham Act provides for recovery of attorney's fees by the prevailing party in exceptional cases. "[a] finding of fraudulent intent or bad faith is not essential to prove infringement where likelihood of confusion already exists.(Sands, Taylor & Wood Co . v. Quaker Oats Co.)

Counterfeit Goods.The Trademark Counterfeiting Act , was enacted in order to increase the sanctions for the counterfeiting of certain registered trademarks above the purely civil remedies available under the Trademark Act. The test is not whether the direct purchasers would be likely to be confused, mistaken or deceived but whether the item will generate confusion of the purchasing public--a term that includes individuals who are potential purchasers of the trademark holders goods as well and who may encounter the allegedly counterfeit goods in a post-sale context--for example, in a direct purchaser's possession (U.S. v. Torkington)

False and Misleading Advertising“False or Misleading advertisement is any false or misleading description of fact, or representation of fact, which… in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities. The truth or falsity of an advertisement usually should be tested by the reactions of the public. ( American Home Products Corp. v. Johnson & Johnson)

The Lanham Act is protects against false advertising and unfair competition §43(a)(1)(B). In a claim of false advertising, where there has been no finding of a willful violation or an intent to deceive, evidence of consumer impact is essential.

Unless a commercial claim is literally false, or a trier of fact has determined that a competitor acted willfully with intent to deceive or in bad faith, a party seeking relief under this section of the Lanham Act bears the ultimate burden OF proving actual deception by using reliable consumer or market research. (United Industries Corp. v. The Clorox Co.) Claim of false or deceptive advertising plaintiff must prove: (1) a false statement of fact by the defendant in a commercial advertisement about its own or another's product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) defendant caused its false statement to enter interstate commerce; and (5) plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by a loss of goodwill associated with its products. To recover money damages under the Lanham Act, a plaintiff must prove both actual damages and a causal link between defendant's violation and those damages. If a plaintiff proves that a challenged claim is literally false courts grant relief without considering whether the buying public was actually misled (actual consumer confusion need not be proved). In assessing whether an advertisement is literally false, a court must analyze the message conveyed within its full context. In some circumstances, even a visual image, or a visual image combined with an audio component, may be literally false. Commercial claims that are implicit, attenuated, or merely suggestive usually cannot fairly be characterized as literally false. (the greater the degree to which a message relies upon the viewer to integrate its components and draw a conclusion, the less likely it is that a finding of literal falsity will be supported).Comparative advertisement - When challenging a claim of superiority that does not make express reference to testing comparative advertising claims (my product is better than yours and not tests prove that my product is better than yours), a plaintiff must prove that defendant's claim of superiority is actually false, not simply unproven or unsubstantiated. Under a "tests prove" claim, a plaintiff must prove only that the tests relied upon were not sufficiently reliable to permit one to conclude with reasonable certainty that they established the proposition for which they were cited. However, to ensure vigorous competition and to protect legitimate commercial speech, courts applying this standard should give advertisers a fair amount of leeway, at least in the absence of a clear intent to deceive or substantial consumer confusion. Materiality. In order to obtain monetary damages or equitable relief in (injunction), a plaintiff must demonstrate that the commercial advertisement or promotion is either literally false, or that if the advertisement is not literally false, it is likely to mislead and confuse consumers. If the statement is shown to be misleading, the plaintiff must also introduce evidence of the statement's impact on consumers, referred to as materialityProve it is misleading If not literally false ( misleading in context), proof that the advertising actually conveyed the implied message and thereby deceived a significant portion of the recipients becomes critical. If a plaintiff does not prove the claim to be literally false, he must prove that it is deceptive or misleading, which depends on the message that is conveyed to consumers. Public reaction is the measure of a commercial's impact. The success of the claim usually turns on the persuasiveness of a consumer survey.

Materiality and PufferyPuffery (non-actionable) comes in at least two possible forms: (1) an exaggerated, blustering, and boasting statement upon which no reasonable buyer would be justified in relying; or (2) a general claim of superiority over comparable products that is so vague that it can be understood as nothing more than a mere expression of opinion.

A statement of fact is one that admits of being adjudged true or false in a way that admits of empirical verification.  (Presidio )

False advertising prima facie case (section 43(a) requires the plaintiff to establish: (1) A false or misleading statement of fact about a product; (2) Such statement either deceived, or had the capacity to deceive a substantial segment of potential consumers; (3) The deception is material, in that it is likely to

influence the consumer's purchasing decision; (4) The product is in interstate commerce; and (5) The plaintiff has been or is likely to be injured as a result of the statement at issue. The failure to prove the existence of any element of the prima facie case is fatal to the plaintiff's claim. (Pizza Hut, Inc. v. Papa John’s International, Inc. ) A plaintiff relying upon statements that are literally true yet misleading cannot obtain relief by arguing how consumers could react; it must show how consumers actually do react. A plaintiff must make some showing that the defendant's misrepresentation was material in the sense that it would have some effect on consumers' purchasing decision.(Pizza Hut, Inc. v. Papa John’s International, Inc.)Materiality and damages The type of evidence needed to prove materiality also varies depending on what type of recovery the plaintiff seeks. Plaintiffs looking to recover monetary damages for false or misleading advertising that is not literally false must prove actual deception. Plaintiffs attempting to prove actual deception have to produce evidence of actual consumer reaction to the challenged advertising or surveys showing that a substantial number of consumers were actually misled by the advertisementPlaintiffs seeking injunctive relief must prove that defendant's representations have a tendency to deceive consumers. prove a tendency to deceive, plaintiffs need to show that at least some consumers were confused by the advertisements.Monetary=actual deception & Injunction= tendency to deceive (some consumers were confused). How many?

The Right of Publicity.

Right of publicity- the right of a person to control the commercial use of his or her identity.There is a right in the publicity value of himself (his picture) and may be transferrable in gross. (Haelan Laboratories, Inc. v. Topps Chewing Gum, Inc.-1953) Speech that entertains, like speech that informs is protected by First Amendment. Cardtoons, L.C. v. Major League Baseball Players Ass’n .

A civil suit for infringement of publicity rights under Okla. Stat. tit. 12, § 1449(A) requires proof of three elements: (1) knowing use of a party's name or likeness (2) on products, merchandise, or goods (3) without the consent of the party claiming publicity rights. If the party claiming publicity rights proves these three elements, then the burden shifts to the opponent to raise a valid defense.

Parody exception (First amendment)A parody is no less protected by the First amendment because it provides humorous rather than serious commentary. Speech that entertains, like speech that informs, is protected because the line between the informing and the entertaining is too elusive for the protection of that basic right. The fact that expressive materials are sold neither renders the speech unprotected nor alters the level of protection under the First amendment. Although a parody is sold in the marketplace, it is not transformed into commercial speech merely because it is sold for profit. Cardtoons, L.C. v. Major League Baseball Players Ass’n .

It is illegal (a tort) to use the voice of someone else through an imitation to sell merchandise. Someone’s voice is a distinctive feature and part of a person’s publicity rights. Midler v. Ford Motor Co..

( White v. Samsung Electronics America, Inc.)

The right of publicity is not limited to the appropriation of name or likeness. 

The common law right of publicity cause of action may be pleaded by alleging (1) the defendant's use of the plaintiff's identity; (2) the appropriation of plaintiff's name or likeness to defendant's advantage, commercially or otherwise; (3) lack of consent; and (4) resulting injury

To prevail on a claim under the Lanham Act,§ 43(a) the plaintiff is required to show that the representation created a likelihood of confusion Factors relevant to a likelihood of confusion include: (1) strength of the plaintiff's mark; (2) relatedness of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) likely degree of purchaser care; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines.  

42C. Limits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822ETW Corp. v. Jireh Publishing, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822C.B.C. Distribution & Mktg., Inc. v. Major League Baseball Advanced Media, L.P... . 833Notes for Discussion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838

Trademark Dilution Revision Act of 2006—When a mark is “famous”A mark is famous if it is 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. In determining whether a mark possesses the requisite degree of recognition, the court may consider all relevant factors, including the following:1

(i) The duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties;2

(ii) The amount, volume, and geographic extent of sales of goods or services offered under the mark;3

(iii) The extent of actual recognition of the mark;4 and (iv) Whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905,

or on the principal register.5

To satisfy the TDRA's fame requirement, a trademark owner must demonstrate that the mark is “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.”6 As noted above, the statute sets forth four non-exclusive factors to consider in “determining whether a mark possesses the requisite degree of recognition.”7 Both the TDRA and FTDA require that the plaintiff prove that its marks are famous,8 and there is substantial overlap between judicial applications of the two definitions of “famous.” It should be stressed that “[d]ilution is a cause of action invented and reserved for a select class of marks-those marks with such powerful consumer associations that even non-competing uses can impinge on their value.”9 As noted by one court: “[o]ne of the major purposes of the TDRA was to restrict dilution causes of action to those few truly famous marks like Budweiser beer … Camel cigarettes … Barbie Dolls … and the like.”10 As one scholar explained, the “TDRA is simply not intended to protect trademarks whose fame is at all in doubt.”11 Thus, only “truly eminent and widely recognized marks” should merit the famous label.12

The legislative history speaks of protecting those marks that have an “aura” and explains that the harm from dilution occurs “when the unauthorized use of a famous mark reduces the public's perception that the mark signifies something unique, singular, or particular.”13 For example, such harm occurs in the hypothetical cases of “DUPONT shoes, BUICK aspirin, and KODAK pianos,” according to the legislative history.14 Thus, for purposes of TDRA § 1125(c), “a mark usually will achieve broad-based fame only if a large portion of the general consuming public recognizes that mark.”15 In other words, the mark must be a household name.16

(a) Profits; damages and costs; attorney feesWhen a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125 (a) or (d) of this title, or a willful violation under section 1125 (c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover(1) defendant’s profits,(2) any damages sustained by the plaintiff, and(3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party.

Limits ETW Corp. v. Jireh Publishing, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822C.B.C. Distribution & Mktg., Inc. v. Major League Baseball Advanced Media, L.P... . 833Notes for Discussion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838

Speech is protected event though it is carried in a form that is sold for profit. The fact that expressive materials are sold does not diminish the degree of protection to which they are entitled under the First Amendment.

Commercial speech is “speech which does no more than propose a commercial transaction.” (ETW Corp. v. Jireh Publishing, Inc.) Even pure commercial speech is entitled to significant First Amendment protection.

Noneconomic justifications for the right of publicity are unpersuasive as compared with the interest in freedom of expression and has stated that publicity rights are meant to protect against the loss of financial gain, not mental anguish. The Eighth Circuit sees merit in this approach. (C.B.C. v. MLB Advanced Media)

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