The United States recognises many different types of trade marks. In addition to marks on goods, the USA recognises rights in service marks, collective marks, certification marks, and trade dress (product packaging or product configuration). Typically, a trade mark consists of one or more letters, a word and/or an image, shape or colour. Although less common, a trade mark may also consist of a distinctive taste, sound, smell or touch. Trade mark rights are created under common law by use of the mark on goods or in connection with the advertising or rendering of services. In addition to rights under common law, the Lanham Act provides for the federal registration of marks and for certain rights and remedies to trade mark owners not available under the common law. Each state in the USA also has its own statutory scheme for the registration and enforcement of trade marks, but any rights granted under these schemes apply only within the state.
Similar to trade marks, trade dress consists of product packaging or product shape and design to identify and distinguish the goods of one seller from another. For a service, it may be the decor or environment in which a service is provided, such as the distinctive decor, menu, and style of a restaurant.
Under the Trademark Act, a collective mark is owned by a collective entity and the mark is used by the members of the collective. The two types of collective marks are: collective trade marks or collective service marks; and collective membership marks.
A collective trade mark or collective service mark is a mark adopted by a "collective" (ie, an association, union, co-operative, fraternal organisation, or other organised collective group) for use only by its members. The members use the mark to identify their goods or services and distinguish them from those of non-members. The "collective" itself neither sells goods nor performs services, but the collective may advertise or otherwise promote its members using the mark.
A collective membership mark is a mark adopted for the purpose of indicating membership in an organised collective group, such as a union, an association, or other organisation. Neither the collective nor its members uses the collective membership mark to identify and distinguish goods or services. The sole function of a collective membership mark is to indicate that the person displaying the mark is a member of the organised collective group.
A certification mark is a mark owned by one person and used by others in connection with their goods or services to certify quality, or regional or other origin.
In addition to the different types of marks, the US Patent and Trademark Office (USPTO) distinguishes between two types of formats when registering a mark: “standard character” marks and “special form” marks. Standard character marks are marks without a design in which the applicant is applying to protect the wording of the mark regardless of how it may appear on a product or service, ie, without claim to any particular font style, size, or colour. Special form marks include a two or three-dimensional design, colour and/or words, letters, or numbers, or the combination thereof in a particular font style or size.
In the USA, trade mark rights are based on actual use of the mark. A registration is not necessary to acquire rights in a mark, but a federal registration conveys significant benefits, including the legal presumption of validity and ownership of the mark, and the presumption of the owner’s exclusive right to use the mark on or in connection with the goods/services listed in the registration throughout the USA and its territories.
Generally, the same standards apply for registering different types of marks. A mark that is inherently distinctive (fanciful, arbitrary or suggestive) is entitled to registration without proof that the mark has obtained a secondary meaning in the eyes of consumers as signifying the unique source of a product or service. In contrast, a mark that merely describes a feature, attribute or purpose of the goods or service can be registered only upon a showing that such secondary meaning has been obtained. In many cases, it will be sufficient for the trade mark owner to claim secondary meaning for its mark by submitting a declaration that the mark has been in continuous and substantially exclusive use for at least five years. In some cases, the United States Patent and Trademark Office (USPTO) may require additional evidence, such as proof of revenues and advertising expenditures under the mark, evidence of unsolicited media coverage, consumer testimony of the mark’s source designating significance, or other evidence.
If trade dress satisfies the federal standards of trade mark or service mark protection as identifying and distinguishing a product or service, then it is registerable. The elements of the trade dress, however, must be listed and defined so that the public understands the exact parameters of the claimed exclusive right. Product configuration trade dress can never be inherently distinctive and always requires proof of secondary meaning before it is entitled to registration.
Each state and the United States Patent and Trademark Office (USPTO) has its own “register”, which is typically available to the public. The USPTO maintains two different types of registers: a Principal Register and a Supplemental Register. The Supplemental Register offers registration for marks that cannot meet all the requirements for registration on the Principal Register—namely, the mark is not inherently distinctive and does not yet have “secondary meaning” (ie, when consumers associate the mark with a single source for the goods or services in question) but is capable of acquiring distinctiveness through use. Marks registered on the Supplemental Register lack the advantages of a registration on the Principal Register. For example, there is no presumption of validity, ownership and exclusive right to use a mark on the Supplemental Register. However, a Supplemental Registration can be cited by the USPTO against subsequent applications as a basis to refuse registration to marks that are likely to cause confusion.
Before a trade mark owner uses and/or applies to register a mark, it is recommended to conduct a search for possible conflicts with previously used but unregistered marks, applied-for marks, and registered marks. This can be done by conducting a search of existing databases and the World Wide Web. The public may conduct searches free of charge using the Trademark Electronic Search System (TESS) on the USPTO website. TESS provides access to text and images of registered marks and marks in pending and abandoned applications. In addition, there are private, commercial databases that offer computerised trade mark searching services for a fee.
When applying for a federal registration, the standards are generally the same for all marks — namely, that the mark is available (ie, not registered by a third party for the same or similar goods/services), that the mark is distinctive, that the mark is or will be used in US Commerce, and that the mark does not fall into one of the exceptions to federal registration listed in Section 2 of the Lanham Act.
The Trademark Manual of Examining Procedure (TMEP), which is available on the USPTO website, lists all of the requirements to obtain a federal trade mark registration. Generally, an application for trade mark or service mark registration must include the following:
An application to register a mark must be filed by the owner of the mark or, in the case of an intent-to-use application, by the person who is entitled to use the mark in commerce. Normally the owner of a mark is the person who applies the mark to goods that he or she produces or uses the mark in the sale or advertising of services that he or she performs.
Applicants may be natural persons or juristic persons. Juristic persons include corporations, partnerships, joint ventures, unions, associations, and other organisations capable of suing and being sued in a court of law. Nations, states, municipalities, and other related types of bodies operating with governmental authorisation may apply to register marks that they own.
The registration of a mark begins with the application, which may be filed to register the same mark in one or more classes (ie, for any or all of the goods or services in connection with which the mark is used or intended to be used in commerce). A filing fee is required for each class in a multiple-class application. An application may be filed on the basis of use of the mark in commerce, an intent to use the mark in commerce, or in the case of foreign applicants on the basis of their home country application or registration.
Upon the filing of an application for registration and payment of the prescribed fee, the USPTO will assign the application to an examining attorney, who will then examine the application. If the applicant is found not entitled to registration, the examiner will issue an office action notifying the applicant of the refusal and the reason thereof. The applicant has a period of six months from the date of the office action in which to reply or amend the application, which will then be re-examined. This procedure may be repeated until the examiner finally refuses registration of the mark or the applicant fails for a period of six months to reply or amend or appeal, whereupon the application shall be deemed to have been abandoned, unless it can be shown to the satisfaction of the USPTO that the delay in responding was unintentional, whereupon the time may be extended.
After examination is completed and the mark is entitled to registration on the Principal Register, the mark is published in the Official Gazette of the USPTO for opposition. Any person who believes that they would be damaged by the registration of a mark may oppose the registration by filing a notice of opposition with the Board, and paying the required fee, within 30 days after the date of publication, or within an extension period granted by the Board.
If the application is not opposed it will either proceed to registration if the use of the mark was demonstrated to the examiner in the initial application, or it will be “allowed” and will register once the applicant can demonstrate the requisite use of the mark in US commerce.
Any application for registration on the Supplemental Register is not published for opposition. It is registered upon approval.
It is not possible to apply to register two or more variations of a trade mark in a single application. Each application can contain only one specifically defined mark to register. In some cases, a trade mark owner may use its mark with a word or other element that may vary depending on the context in which that mark is being used. Generally, if an application seeks registration of a mark with a significant changeable or "phantom" element, the examining attorney must consider whether the element encompasses so many potential combinations that the drawing would not give adequate constructive notice to third parties as to the nature of the mark and a thorough and effective search for conflicting marks is not possible. If so, the examining attorney must refuse registration on the ground that the application seeks registration of more than one mark.
An application to register a trade mark must be approved unless it falls within one of the statutory bases for refusing registration. These grounds are:
The process for overcoming refusals outlined above varies depending upon the nature of the refusal. The general process is described in 1.5 Registration Procedure. If the refusal is based on likelihood of confusion with one or more prior registrations, the applicant may submit evidence and arguments as to why its mark is not likely to be confused with the cited marks. If the refusal is based upon descriptiveness or surname, the applicant may submit evidence of acquired distinctiveness, which may include:
If the applicant is unsuccessful in persuading the examiner to withdraw the refusal, the applicant can appeal the refusal to the TTAB.
During its examination of an application, the examining attorney must conduct a search of USPTO records to determine whether the applicant’s mark so resembles any registered mark(s) as to be likely to cause confusion or mistake, when used on or in connection with the goods or services identified in the application. The examining attorney also searches pending applications for conflicting marks with earlier effective filing dates. If the examining attorney determines that there is a likelihood of confusion between applicant’s mark and a previously registered or applied-for mark or marks, the examining attorney refuses registration of the applicant’s mark under §2(d).
If the examining attorney refuses a trade mark registration on the grounds that the mark is “merely descriptive” under Section 2(e)(1) of the Lanham Act, the applicant may show acquired distinctiveness by relying on a claim of ownership of one or more active prior registrations on the Principal Register of the same mark for goods or services that are sufficiently similar to those identified in the pending application.
Before an application is approved for publication, a third party has an opportunity to present evidence bearing on the registrability of a mark by filing a “letter of protest” with the Office of the Deputy Commissioner for Trademark Examination Policy. The Deputy Commissioner will accept a letter of protest filed before publication where it is determined that the evidence is relevant and supports any reasonable ground for refusal appropriate in ex parte examination and, upon acceptance of the letter, the Deputy Commissioner will forward the relevant evidence (but not the letter itself) to the examining attorney.
Once an application has been published for opposition, any person who believes that he or she would be damaged by the registration of a mark on the Principal Register may oppose registration by filing a notice of opposition with the Board, and paying the required fee, within thirty days after the date of publication, or within an extension period granted by the Board for filing an opposition. At the pleading stage, all that is required is that a plaintiff allege facts sufficient to show a "real interest" in the proceeding, and a "reasonable basis" for its belief that it would suffer some kind of damage if the mark is registered. Once standing to oppose is shown, the opposer may base its challenge on any statutory basis in the Lanham Act which negates the applicant's right to registration of the mark.
The applicant and the USPTO both have the ability to amend an application during prosecution to a limited extent.
The applicant may narrow or limit the goods/services in an application or alter the mark provided that the alteration is not material (ie, the mark’s meaning is not changed and a new search is not required). The applicant listed in the application can only be changed to correct a clerical error in the identification of the applicant, or where the application is assigned and the assignment has been recorded with the Assignments Recordation Branch. The examining attorney may issue an examiner’s amendment whenever appropriate to expedite prosecution of an application. An examiner’s amendment is a communication to the applicant in which the examining attorney states that the application has been amended in a specified way.
Authorisation by the applicant to enter an examiner’s amendment is usually given in a telephone conversation, e-mail communication, or interview between the examining attorney and the applicant or the applicant’s qualified practitioner. Examiner’s amendments generally are not used when there are statutory refusals. However, if there is a potential statutory refusal, and an amendment will obviate the refusal, the examining attorney may attempt to resolve the issues through an examiner’s amendment.
The USPTO can revoke or change its examination decisions, adding a refusal or requirement, at any time before the publication of the application. After the application is published, the USPTO may add a refusal or requirement only if it would be “clear error” not to do so.
A trade mark application may be assigned, and the applied-for mark licensed, during the prosecution of the application. An intent-to-use application may be assigned, however, only in connection with the transfer of the business to which the application pertains, provided the business is ongoing and existing. Otherwise, the assignment may be treated as an “assignment in gross” and, thus, void the application.
In the process of registering a mark with the USPTO, the application is examined by an examining attorney to see if any of the statutory bars to registration apply to the applicant's mark. For example, in an office action, the examiner may reject the application in whole or in part, request further information or request a disclaimer of part of the mark. The applicant then has the opportunity to respond.
Upon review of a response, the examining attorney may state that the refusal(s) to register, or the requirement(s), is final. After a final rejection that maintains a substantive refusal to register, the applicant may respond by timely filing: a notice of appeal to the Trademark Trial and Appeal Board (TTAB); or a request for reconsideration that seeks to overcome any substantive refusals to register and/or comply with any outstanding requirements. Only a final refusal can be appealed and the applicant must file the appeal within six months of the issuance date of the final refusal.
A TTAB decision can be appealed to the Court of Appeals for the Federal Circuit or a federal District Court.
Except for foreign applications applying on the basis of a registration of the mark in their home country, an applicant must demonstrate use of the mark in commerce before a registration will issue. If the application is filed based on use in commerce, the mark must be in use in commerce on or in connection with all the goods and services listed in the application as of the application filing date. If the application is filed on an "intent-to-use" basis, the application must include a verified statement that the applicant has a bona fide intention to use the mark in commerce on or in connection with the goods or services listed in the application as of the application filing date. Prior to registration, the applicant must use the mark in commerce on or in connection with all the goods or services specified in the application and file an allegation of use.
An applicant may divide the application into two or more separate applications by filing a request to divide and paying applicable fees. An applicant may file a request to divide at any time between the filing of the application and the date the examining attorney approves the mark for publication; or during an opposition, concurrent use, or interference proceeding, upon motion granted by the TTAB. Additionally, with respect to intent to use applications, a request to divide may also be filed with a statement of use, or at any time between the filing of a statement of use and the date the examining attorney approves the mark for registration. In a multiple-basis application, a request to divide out goods/services having a particular basis may also be filed during the period between the issuance of the notice of allowance and the filing of the statement of use.
Federal trade mark registrations are granted for ten-year periods running from the date the registration is granted, provided that a declaration of continued use is filed between the fifth and sixth anniversary of the registration date. The registration can be renewed every tenth anniversary from the registration date, if the registered mark continues to be used in commerce. The renewal can be filed as early as one year before the expiration date of the registration and, with payment of an additional fee, as late as six months after the expiration date. If the registration is not renewed within this window, it will expire and it cannot be revived.
The first sale of an item bearing a trade mark typically exhausts the trade mark owner’s rights with respect to that specific item. This allows that item to be resold by the buyer without permission of the trade mark owner. However, third parties may not lawfully misrepresent themselves as an “authorised” dealer in the course of reselling the product. Exceptions to this rule exist in the context of grey market goods and where the product is sold through authorised dealers subject to certain conditions such that a resale of the product that is not subject to those conditions would effectively render the product a materially different product.
The USA is a party to the Madrid Agreement and the Madrid Protocol. International Registration applications can be filed based on a US application or registration. While International Registrations designating the USA are renewed through the World Intellectual Property Organisation, the owner must also file an Affidavit of Continued Use or Excusable Non-use in the USPTO to prevent the extension of protection from being cancelled. This Affidavit must first be filed between the fifth and sixth anniversary of the dates of registration in the United States and thereafter within the year prior to every ten-year period after the date of registration in the United States. The Affidavit may be filed late, within a six-month grace period, upon payment of an additional fee.
Incorrect information in a trade mark application can be corrected in certain circumstances, for example, if correcting the goods/services would not expand, broaden or add to the listed goods/services, if correcting the mark would not materially alter the mark, if correcting a clerical error and if the incorrect information was an honest, good faith error not intended to deceive the USPTO.
If incorrect information is provided to the USPTO in bad faith to induce the USPTO to issue a registration, the USPTO may cancel the resulting registration based upon “fraud before the USPTO”. This is ordinarily extremely difficult to prove.
A design mark may be amended only if the alteration is not considered material. In determining whether an amendment is a material alteration, the controlling question is always whether the new and old forms of the mark create essentially the same commercial impression.
In the USA, the ® symbol is used to indicate that a mark is federally registered. This symbol should only be used once the federal registration has issued; otherwise, the mark owner should use a TM to designate that the mark is being claimed as a mark but has not registered as a mark. The owner of an unregistered but claimed mark can use TM either if it has a pending application that has not yet been examined or approved or if it has common law use rights in the mark but has not filed an application.
A trade mark assignment is a transfer of an owner’s rights, title, and interest in a trade mark or service mark. The transferring party (“assignor”) transfers to the receiving party (“assignee”) its property rights in the mark. The assignment must be in writing duly executed by the assignor and assign the mark along with the goodwill of the business associated with that mark.
If a US trade mark is assigned without the associated goodwill, the transfer is determined to be an “assignment in gross” and can result in an assignee’s losing rights to the assigned trade mark. Therefore, a trade mark that is not yet in use in the United States, and that is the subject of an intent-to-use–based US trade mark application, must be transferred together with the part of the ongoing and existing business connected with the mark.
Assignment of an application or registration does not need to be recorded in the USPTO to be effective. However, if it is not recorded, the assignment may not be effective against a subsequently dated but recorded assignment. An assignment shall be void against any subsequent purchaser for valuable consideration without notice, unless the prescribed information reporting the assignment is recorded in the USPTO within three months after the date of the assignment or prior to the subsequent purchase. A written assignment, duly acknowledged and recorded, is prima facie evidence of the assignment, which enables the assignee to invoke the registration against third parties.
An assignment differs from a license, which is the grant of permission to use a mark in some manner but does not transfer any rights of ownership in the mark.
A mark is assigned by written assignment, identifying the parties, the mark(s) being assigned, the USPTO application(s) and/or registration(s) for such mark(s), if applicable, and the effective date of the assignment. The assignment must include a statement that the assignee is acquiring all right, title and interest in the mark(s) and the underlying goodwill of the business associated with the mark(s). The assignment must be signed by the assignor, or someone designated with the authority to bind the assignor.
An assignment is not required to be recorded in the USPTO, although there are consequences for not recording an assignment of an application or registration in the USPTO Assignments Division. If it is not recorded, the assignment may not be effective against a subsequently dated but recorded assignment. An assignment shall be void against any subsequent purchaser for valuable consideration without notice, unless the prescribed information reporting the assignment is recorded in the USPTO within three months after the date of the assignment or prior to the subsequent purchase. A written assignment, duly acknowledged and recorded, is prima facie evidence of the assignment, which enables the assignee to invoke the registration against third parties.
A security interest is a property interest created by agreement between parties or by operation of law over assets in order to secure the performance of an obligation. Because a trade mark is a form of property and an asset of the business that owns the trade mark, it can be used as a security interest, subject to rights in rem, assigned by way of security, and be levied in execution. All of these transactions should be recorded in the Assignments Division of the USPTO.
While an application or registration itself cannot be licensed, the right to use a mark may be licensed.
Any type of licence can be granted by a mark owner (ie, exclusive, non-exclusive, for some or all of the goods or services listed in the registration, for specific geographical areas), provided that the mark owner exercises control over the total number of licensees and their use of the licensed mark. The licence should not be a “naked licence”, ie, licensed without quality controls ensuring that the mark is being used precisely as the mark owner designates it. A licence need not be recorded, but can provide notice to third parties of the rights of the licensee.
A licence is an agreement between the mark owner (“licensor”) and the licensee, specifying the terms of the licence, including the duration and territory of the licence, details of the marks and associated goods and services being licensed, grounds for termination, how the licensor is controlling the quality of the goods or services. The licence also includes a statement that the licensee recognises the licensor as the owner of the mark, and that the licensee will not challenge the validity or ownership of the mark. The licence agreement is typically executed by both the licensor and licensee.
A licence does not need to be recorded in the USPTO. Licensing deals with the use of a mark, not its ownership or registration. Licensed use inures to the benefit of the licensor. Thus, an applicant or registrant can claim licensee use of the mark as its own use for purposes of supporting the ongoing validity of the registration.
While US law recognises that property owners should be able to license their property for any term or duration, most trade mark licences are not perpetual. One obstacle to granting a perpetual licence is quality control issues.
In addition to the requirements discussed above, all licences and assignments under US law must contain valid consideration. Otherwise, the contract will be deemed unenforceable.
Any person who believes that he or she would be damaged by the registration of a mark on the Principal Register may oppose registration by filing a notice of opposition with the Board, and paying the required fee, within thirty days after the date of publication, or within an extension period granted by the Board for filing an opposition.
The notice of opposition must include a concise statement of the reasons for the opposer’s belief that the opposer would be damaged by the registration of the opposed mark and must state the grounds for opposition. See 1.7 Refusal of Registration for further information.
Any person who believes it is or will be damaged by registration of a mark has standing to file an opposition. At the pleading stage, all that is required is that a opposer allege facts sufficient to show a "real interest" in the proceeding, and a "reasonable basis" for its belief that it would suffer some kind of damage if the mark is registered. Examples may include a competitor or an applicant that is denied registration because of the existence of the opposed application.
Oppositions follow the Federal Rules of Civil Procedure and discovery is similar to that in federal court. However, because oppositions are administrative proceedings, the TTAB can only decide the registration of a mark, not its use or any monetary damages. In opposition proceedings, there are initial disclosure requirements, a mandatory discovery conference and a period of discovery that typically includes interrogatories, requests for admissions and requests for production of documents, all of which are limited to 75 each. Depositions may be taken and motions may be made in opposition proceedings as well.
After the discovery period has been completed and the parties have completed their pre-trial disclosures, each party has a testimony period with which to present their evidence to the TTAB. Specifically, the opposer will have a 30-day period to present its case in chief, after this, the applicant will have 30 days to present its case and the opposer will finally have 15 days to present any rebuttal evidence.
An oral hearing is optional and is scheduled only if a timely request is filed by a party to the proceeding. In the vast majority of cases, an oral hearing is not requested. The oral hearing provides a party with one last opportunity to emphasise its strongest arguments, and to refute its adversary’s arguments. It is particularly useful in cases with complex issues or a complex record, or where the defendant needs to respond to arguments in the plaintiff’s reply brief. If neither party requests an oral hearing, the case will be decided on the evidence made of record during the testimony periods.
A party may appeal an adverse decision of the TTAB within 60 days of the decision. The appeal must be filed with either the US Court of Appeals for the Federal Circuit or a district court.
One benefit of filing in district court is the opportunity to present new evidence. Both the new evidence and the TTAB record are reviewed with “de novo” scrutiny. In addition, the appealing party can present new issues which were not brought before the TTAB and the case can be expanded to include a prayer for injunctive relief for trade mark infringement. The adverse party may also counterclaim for its own federal or common law claims.
The only type of TTAB decision that may be appealed, whether to the US Court of Appeals for the Federal Circuit or by way of civil action, is a final decision (ie, a "final dispositive ruling that ends litigation on the merits" before the TTAB). Interlocutory decisions or orders (ie, decisions or orders that do not put an end to the litigation before the TTAB) are not appealable. In an inter partes proceeding, a party may obtain review of an order or decision of the TTAB which concerns matters of procedure (rather than the central issue or issues before the TTAB), and does not put an end to the litigation before the TTAB, by timely petition to the Director.
If a trade mark is infringed, the trade mark owner may initiate a lawsuit against the infringer by filing a complaint. The complaint may assert different causes of action under federal and/or state law, depending on the nature of the infringement and whether the mark is registered. For example, a cause of action for federal trade mark infringement can be asserted only if the mark has been registered with the USPTO, but a federal claim for false designation of origin, false endorsement, or false association can be based on an unregistered mark if the defendant is using the infringing mark in commerce.
As an alternative to filing an infringement action in federal court, the trade mark owner may initiate an investigation before the International Trade Commission in cases where the infringing goods are being or have been imported into the United States. The ITC is an independent, quasi-judicial federal agency with authority to investigate unfair competition, including trade mark infringement. If successful, the ITC may prohibit the importation of the infringing goods and prohibit the domestic use, sale, and marketing of imported infringing goods. However, monetary relief is not available in ITC actions.
For online infringements, the trade mark owner may have additional options, such as initiating a complaint with the online platform where the infringement is occurring under the relevant platform’s trade mark policy or sending a demand letter to the website hosting company demanding that the infringing website or web page be made inaccessible.
A trade mark owner can initiate an infringement case in any state trial court having personal jurisdiction over the alleged infringer. This is true whether the mark is unregistered or has been federally registered at the USPTO. However, a trade mark owner is not limited to the state courts. In many cases, the trade mark owner could and often does choose to file its case in any federal district court having personal jurisdiction over the alleged infringer. The case can be filed in federal district court when any of the following circumstances exists:
In B&B Hardware, Inc v Hargis Industries, Inc, the US Supreme Court ruled that the decision of the TTAB can and should have preclusive effect in subsequent court litigation between the parties when the issues adjudicated by the TTAB are materially the same as those before the court. Issues decided by the TTAB that have been afforded preclusive effect in later litigation include a party’s standing to challenge a trade mark registration, rights of priority, and fraud on the USPTO. That said, a decision by the TTAB that a mark is or is not likely to cause confusion may or may not be given preclusive effect by a court. In many cases, because the TTAB’s consideration is limited to what appears on the face of applicable trade mark applications and registrations, the TTAB may not have considered or addressed marketplace factors that would bear on the issue of infringement in a court action. Thus, it is arguable whether a decision on likelihood of confusion would have any preclusive effect. Nevertheless, even if a court determines it is not bound by the prior decision of the TTAB, the court may find the decision persuasive.
A court is not bound by decisions of examining attorneys in the USPTO to approve or deny registration of a mark. Indeed, the USPTO takes the position in examining marks that it is not bound by prior decisions of examining attorneys as to approval or denial of registration.
An alleged infringer can initiate a declaratory judgment action so long as there is a real dispute for adjudication. Whether the dispute is real depends upon the circumstances of the case. The receipt of a demand letter may or may not be enough to establish declaratory judgment jurisdiction in court. For example, a letter demanding that the alleged infringer “cease and desist” all use by a certain date and indicating that a lawsuit will be filed if the alleged infringer does not comply would almost certainly permit the filing a declaratory judgment action in response.
However, a letter putting the alleged infringer on notice of the trade mark owner’s federal registration and the potential for conflict if the parties’ respective areas of trade ever converge may not be enough. A trade mark owner cannot file suit unless there is a likelihood of confusion and, as long as the parties’ respective market areas do not overlap and customers are unlikely to encounter both marks, there is likely no real dispute yet to be resolved. Similarly, it has been held by some courts that the filing of an opposition or cancellation action before the TTAB is not enough because the TTAB only decides registration disputes and not questions of infringement. The alleged infringer must be able to demonstrate a real threat of a trade mark infringement action being filed against it.
The federal and state courts in the United States have concurrent jurisdiction over cases involving federally registered trade marks. Those decisions may be appealed to the appropriate federal and state courts of appeals depending on the geographic location of the trial court. Federal appellate court decisions may be appealed to the US Supreme Court, while state appellate court decisions would be appealed to the relevant state’s highest court. The federal district courts must follow the law as it has been interpreted by its applicable regional circuit court of appeals. Because these interpretations can vary among the circuits on certain issues, it is important for any plaintiff to consider these issues before it decides where to file suit.
A trade mark owner dissatisfied with the decision of the TTAB, or a party to an opposition or cancellation proceeding before the TTAB, may appeal that decision to the Federal Circuit Court of Appeals or, alternatively, it may file suit in any federal district court having jurisdiction over the parties. If a case is filed in federal district court, additional evidence may be submitted.
Except for establishing that there is a real controversy for a court to adjudicate and that the court in which the suit is filed has jurisdiction to entertain the case, there are no prerequisites to filing an infringement suit. Often, however, a trade mark owner will send at least one demand letter to try to resolve the dispute without litigation. A letter puts the infringer on actual notice of the claim and can provide a basis for establishing intentional infringement if the infringer does not cease the infringement. A finding of intentional infringement can lead to the award of enhanced damages.
It is important for the owner of a federal registration to have given notice of that registration. This is typically done by using the ® symbol on public uses of the mark. A registered trade mark owner who fails to give any notice that its mark is registered will not be able to recover damages or the infringer’s profits unless the infringer has actual notice of the registration.
A federal trade mark registration is required to obtain certain remedies that may not be available to a trade mark owner relying only upon its common law trade mark rights. For example, statutory damages are available only in cases involving a counterfeit of a registered mark.
In court proceedings, a corporate entity cannot represent itself and must retain a lawyer, but an individual is not required to hire a lawyer and may represent himself or herself. A corporate entity can be represented in court by its in-house attorneys. Due to the nature of litigation and the intricacies of trade mark law, it is always recommended that all parties be represented by competent counsel with experience in trade mark cases.
Temporary restraining orders and preliminary injunctions are available in trade mark cases. However, these are extraordinary remedies and are difficult to obtain. They are more likely to be granted in counterfeiting cases and cases where it can be clearly shown that ongoing infringement will seriously injure the reputation and goodwill of the trade mark owner. To obtain a preliminary injunction, a plaintiff must show:
A trade mark owner must convince the court that the harm it will suffer without an injunction cannot be sufficiently measured or compensated by an award of money damages at the end of the case.
A potential defendant who has a credible belief that it will be sued for trade mark infringement may choose to file a pre-emptive action for a declaratory judgment of non-infringement. Doing so may allow the defendant to litigate the case close to home or in a jurisdiction with an interpretation of the relevant law that is more favourable to the defendant’s case. However, there must be a real controversy for a court to accept jurisdiction of a declaratory judgment case. The mere possibility of a future dispute will not be enough. In addition, in any case involving a federally registered trade mark, the defendant may challenge the validity of the registration if there are grounds upon which to do so. If successful, this could weaken the plaintiff’s case.
If the potential defendant can establish that it has been damaged as a result of a registration procured by fraud, then it may assert a claim for damages against the registered trade mark’s owner under 15 USC §1120. The damage must arise from the actual registration of the mark as opposed, for example, to damages arising from the mark owner’s use of the mark or mere assertion of an infringement claim.
If a trade mark owner files or maintains a frivolous claim for trade mark infringement, or engages in abusive litigation tactics, it may be subject to an award of sanctions by the court. Sanctions could include an award of attorney’s fees or other monetary relief to the defendant and/or even dismissal of the plaintiff’s claims.
Discovery is an important (and expensive) part of trade mark litigation in the USA. In federal court, and some state courts, the parties must voluntarily disclose certain evidence at the beginning of the case. The required disclosures can vary. At a minimum, a party must typically disclose documents and potential witnesses with relevant information it may use as part of its case. Some courts require even more substantial disclosures, including evidence that may hurt a party’s case. Once initial disclosures are completed, the parties may take depositions of potential witnesses and serve document requests, written questions, requests for the admission of certain facts. The number of requests a party may serve is governed by both the rules of procedure applicable to the particular court, and may even be limited by the judge hearing the case, so this number can vary.
If a party intends to call an expert witness, such as a survey expert, linguist, or damages expert, it will have to disclose the identity of that expert and his or her opinions during the discovery period. The expert must typically prepare and provide a written report and may be deposed.
A complaint must contain a short, plain statement showing the basis for the court’s jurisdiction; a short, plain statement of the claims that, if proven, demonstrate the right to the relief being requested; and a demand for the relief requested. A plaintiff may plead claims, or request certain relief, in the alternative. For example, based on the same set of facts, a plaintiff may request punitive damages on a state law unfair competition claim even though punitive damages are not available under a federal statutory trade mark infringement theory. Although a detailed recitation of the facts is not necessary, it is not enough for a plaintiff merely to recite the general elements of a claim.
In federal court, an initial complaint can be amended or supplemented once as a matter of course within 21 days after serving it, or 21 days after an answer or motion to dismiss, motion to strike, or motion for a more definite statement has been filed by the defendant. Thereafter, it can be amended only with the defendant’s consent or the approval of the court. These rules may be modified by the applicable local rules of the district court in which the case is filed. State courts have similar but not necessarily identical rules for amending pleadings.
Class actions are permitted in the USA but would be unusual in trade mark cases. Because the definition of a trade mark pertains to the designation of a single source, the circumstances for a plaintiff’s class action suit would not seem to exist. Conceivably, circumstances could arise where a trade mark owner might file suit against a defendant class. Defendant class actions are rare. They must meet the same requirements for a plaintiff’s class action case. To even establish a defendant class, the trade mark owner would have to show that:
As a general rule, the trade mark owner must have a colourable claim against each defendant class member.
In order to obtain an award of damages or to recover an infringer’s profits, the owner of a federally registered mark must have given notice to the public of its registration or must otherwise prove that the infringer had actual knowledge of the registration, 15 USC §1111. Notice is typically provided through use of the ® in connection with the registered mark.
Any plaintiff, including a trade mark owner in a trade mark case, must have a reasonable, good faith basis to assert a claim. By signing and submitting the complaint to initiate the lawsuit, the plaintiff and its attorney are verifying that the complaint is not being presented for any improper purpose, the claims are warranted by existing law or by a non-frivolous argument for extending, modifying, or reversing existing law or for establishing new law, and the factual contentions have or likely will have evidentiary support. Any complaint submitted in violation of these representations is subject to sanctions from the court.
The parties to an action for trade mark infringement are usually the trade mark owner and those parties accused of infringement. In the case of a defendant corporation or other business entity, the owners, managers, officers, and/or directors of the entity may be named and held personally liable if they have actively participated in or directed the infringing activity.
In some cases, an exclusive licensee of the trade mark may initiate a claim for infringement and/or false designation of origin. With respect to a federally registered mark, if the exclusive licence effectively grants rights akin to ownership of the mark (ie, the trade mark owner retains no right to use the mark and has expressly authorised the exclusive licensee to sue for infringement), the exclusive licensee can pursue a federal trade mark infringement action. Even if the mark is not registered or the licence does not convey rights akin to ownership, courts have allowed exclusive licensees to bring actions for false designation of origin under Section 43(a) of the Lanham Act. In contrast, non-exclusive licensees do not have standing to pursue such infringement claims.
To establish trade mark infringement, the trade mark owner must show that it owns a valid trade mark, that its trade mark rights were established prior to the defendant’s alleged infringement, and that the defendant’s use of its mark is likely to cause confusion. In evaluating the likelihood of confusion, courts consider various factors, including, without limitation, the similarity of the marks, the commercial strength and inherent distinctiveness of the plaintiff’s mark, the similarity of the goods and services for which the competing marks are used, the trade channels through which the parties’ respective goods and services are sold, the relevant class of potential buyers of the goods and services, the sophistication of those purchasers, and the existence of any evidence of actual confusion. This list is not exhaustive, and no particular factors are dispositive in every case.
In order to prove infringement, it is not necessary for the plaintiff to prove that the defendant has used the infringing material as a trade mark. The only question is whether the defendant’s use is likely to cause confusion with the plaintiff’s trade mark. However, in the case of descriptive words and phrases, the defendant may be able to prove, as an affirmative defence, that it is not using the relevant word or phrase as a mark, but only in a descriptive, fair use to describe its goods or services. The context of that use will be a critical factor in determining whether that use is a fair, descriptive use. For example, fair use is more likely to be found where the defendant has used the word or phrase as part of a sentence describing its product without highlighting or emphasising the descriptive terms apart from the surrounding text. In any case, if the defendant is successful in proving fair use, it will prevail even if though there may be some potential confusion.
A claim for trade mark infringement is subject to a variety of potential defences. In the USA, affirmative defences refer to those defenses upon which the burden is on the defendant to prove. Depending on the circumstances of the case, such affirmative defences may include prior use of the mark, that the plaintiff’s mark has become generic, a fair descriptive use of the allegedly infringing term or phrase, parody, abandonment, license, laches, acquiescence, waiver, estoppel, First Amendment/free speech, unclean hands, and fraud on the USPTO. The issue of the nominative fair use of the plaintiff’s mark, in which the defendant has used the plaintiff’s mark to refer to the plaintiff or the plaintiff’s goods and services, is not treated consistently. Some courts, namely those within the Third Circuit, treat nominative fair use as an affirmative defence, while others, such as in the Ninth Circuit, apply a different test to the evaluation of likely confusion.
Experts are commonly used in trade mark cases in the USA on issues of damages, likelihood of confusion, acquired distinctiveness of the plaintiff’s mark, and genericness. Under the rules of evidence, for expert testimony to be admitted and considered, the party submitting that testimony must show that the expert is qualified by knowledge, skill, experience, education, and/or training to offer an opinion on the matter. If qualified as an expert, the expert’s testimony will be admitted if the judge determines that it will help the judge or jury understand the evidence or determine a fact in issue; the testimony is based upon sufficient facts and the product of reliable principles and methods; and the expert has reasonably applied the principles and methods to the facts in issue.
Trade mark surveys, if done correctly, can be powerful evidence for either party. While not legally required, if a party with sufficient resources to conduct a likelihood of confusion survey fails to present a survey in evidence, some courts will hold this against the party. This is another example of the importance of understanding the applicable case law in the particular jurisdiction in which the case is to be filed.
Trade mark infringement is typically a civil matter enforced by the trade mark owner in a civil action filed against the infringer. However, trade mark counterfeiting can also be a criminal offense, 18 USC §2320. In order to establish the criminal offense of counterfeiting, the government must prove:
The owners of a federal trade mark registration on the Principal Register may record the registration with the US Customs and Border Patrol, which maintains a database of all recorded IP rights to assist in its efforts to prevent the importation of goods that infringe registered marks. Recordation is obtained via an electronic application available on the Customs and Border Patrol website. The trade mark owner must submit the registration number and digital image of the mark to be recorded.
Cancellation of a trade mark registration is an equitable remedy that may be granted by the TTAB at the USPTO or by a civil court in an action that involves the registered mark. A registration can be cancelled in whole or in part if appropriate grounds for cancellation are proved. This does not affect any common law trade mark rights that the owner may otherwise have, ie, it does not necessarily invalidate the underlying mark. Depending upon the reason for cancellation, the trade mark owner may still have protectable rights under common law.
Nevertheless, a party may seek cancellation because the registered mark has been cited against an application that party has filed in the USPTO as a basis for refusing registration of that party’s mark. A defendant in an infringement case may seek cancellation of a registration for a mark asserted against it in order to eliminate the statutory and evidentiary presumptions to which a registered mark is entitled – namely, that it is a valid mark, and that the plaintiff is the owner with the exclusive right to use the mark in connection with the registered goods and services. The plaintiff’s case may be harder to prove if it cannot rely upon its federal registration.
A petition to cancel an existing registration can be filed with the TTAB at the USPTO. A cancellation action cannot be initiated in the civil courts unless there is some other independent basis for jurisdiction over the case, such as where the registered trade mark owner has first initiated an infringement case or where the party seeking to cancel the registered mark has filed a valid declaratory judgment action of non-infringement. A civil court has power to cancel or modify any registration involved in a case pending before it, 15 USC §1119.
During the first five years following the registration of a mark, that registration may be cancelled on any basis for which it can be shown that the registration should not have issued or should not be maintained. These grounds may include, among others, that the mark is merely descriptive and has not acquired distinctiveness of a mark, that the mark was not in use in commerce by the relevant date prior to registration, or that the registered mark is likely to be confused with the petitioner’s prior registered or common law mark.
Once the registration has reached its fifth year anniversary, however, the grounds for cancellation are limited by statute to the following: that the mark has become generic for the covered goods or services; that the mark has been abandoned; that the registration was obtained fraudulently; that the mark falsely suggests a connection with persons, institutions, beliefs, or national symbols, or brings them into contempt, or disrepute; in the case of mark for wines or spirits, that it consists of a geographic indication other than the origin of the goods; that the mark consists of the flag, coat of arm or insignia of the United States, or of any State or municipality, or of any foreign nation or otherwise; that the mark consists of or comprises a name, portrait, or signature identifying a particular living individual without their written consent, or the name, signature, or portrait of a deceased President of the United States during the life of his widow, without her written consent; or if the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used, 15 USC §1064.
There is also no statutory limitation for cancelling registrations for collective marks and certification marks if they are being used contrary to bases upon which they were granted, or in the case of a certification mark, if the owner no longer controls or is able to control use of the mark, engages in the production or marketing of any goods or services to which the certification mark is applied, permits the use of the certification mark for purposes other than to certify, or discriminately refuses to certify or to continue to certify the goods or services of any person who maintains the standards or conditions which such mark certifies.
Any person who believes they are or will be damaged by the continued registration of a mark is entitled to bring a cancellation proceeding against an existing trade mark registration, 15 USC §1064. This has been interpreted by the courts to be a low standard allowing anyone who is not a “mere interloper” to institute such proceedings. A petitioner seeking to cancel another’s registration is not required to plead or prove economic damages as a result of continued registration of the challenged mark.
A registration can be cancelled in part if the grounds for cancellation apply only to a portion of the goods or services described in the registration. For example, if the trade mark owner is found to have abandoned the mark as to some but not all of the registered goods, the registration may be cancelled as to the abandoned goods but will remain in full force and effect as to the non-abandoned goods.
In the course of cancellation proceedings, the trade mark office is authorised to modify or amend a registration to limit the goods and services identified in the registration or to restrict the scope of a registration in cases where concurrent use is established. In some cases, the petitioner may be seeking what is in effect a partial cancellation by requesting a limitation of the goods and services on grounds that a likelihood of confusion with the petitioner’s mark will be avoided if the limitation is ordered. In such cases, the petitioner must prove that the limitation properly applies to the registrant’s goods and services as used and that such limitation will obviate confusion between the petitioner’s and registrant’s respective goods.
Similarly, it is not uncommon for the parties to agree to an amendment as part of a settlement of their dispute. This resolution frequently occurs where the parties have agreed to co-exist and/or where the registrant has consented to registration of the petitioner’s mark where the registered mark had been cited as a bar to registration of the petitioner’s mark.
A court having proper and independent jurisdiction over the action and the parties in a trade mark infringement case is empowered to “determine the right to registration, order the cancellation of registrations, in whole or in part, restore cancelled registrations, and otherwise rectify the register with respect to the registrations of any party to the action”, 15 USC §1119. This statute does not allow a party to initiate a lawsuit solely for the purpose of cancelling another’s registration. There must be some other independent basis for jurisdiction before the court. Typically, a cancellation claim under this statute would be pleaded as a counterclaim to the plaintiff’s claim for infringement of the mark.
Infringement claims are never addressed by the TTAB because its jurisdiction is limited to deciding the registrability of a mark. In most cases, if a cancellation action is pending before the TTAB, and an infringement case involving the same mark is pending in a court, the TTAB will stay the cancellation action pending resolution of the court case. This is because TTAB decisions are not binding on the courts, but court decisions are binding upon the TTAB.
Trade mark litigation in the USA follows the rules of civil procedure applicable to all civil cases pending before the court. The Federal Rules of Civil Procedure apply in all federal district courts, whereas state rules of civil procedure apply in state courts. Federal courts have local rules that also apply, and, in any given case, a judge may have their own specific procedures that the parties must follow.
Trade mark infringement cases are handled by courts of general jurisdiction. As such, the judges handling these cases handle many other types of cases as well. Although some federal judges may have handled a few trade mark cases, a party should not expect the judge to have in depth knowledge of trade mark law. Most judges will have had little to no trade mark experience. This is especially true for state court judges.
Most trade mark cases involve claims for both monetary and equitable relief. Whether a particular case will be heard by the judge or by a jury will depend upon the nature of the claim and of the relief requested, as well as whether either party timely requests a jury for those issues that may be tried to a jury.
Equitable claims for relief, such as injunctions, an accounting of the defendant’s profits, seizure orders, cancellation/modification of federal registrations, declarations of non-infringement, and award of attorney’s fees are determined by the judge. Legal claims, such as money damages, may be tried to a jury but only if one of the parties makes a timely request for a jury trial.
In federal district court, a jury trial request on any issue must be demanded no later than 14 days after service of the last pleading directed to the issue. If one party timely demands a jury trial as to some but not all issues that may be heard by the jury, any other party has 14 days from services of the first party’s demand to demand a jury as to any or all remaining issues. If a jury is not demanded in a timely manner, the right to a jury trial is waived. State court rules for jury trials may differ.
If a jury trial has been demanded, the parties may agree to have one or more issues decided by the judge instead of the jury. Likewise, if no jury trial was properly and timely demanded, the judge has discretion to order a jury trial as to any issue for which it could have been demanded. Even with respect to equitable claims, the judge may permit use of an advisory jury or, with the parties’ consent, may have a jury decide the case.
When equitable claims are combined with claims for legal relief, and arise from the same set of operative facts, then a jury may be asked to decide all common issues of fact.
A trade mark case can be settled at any time if the parties choose to do so. Settlement is always within the discretion of the parties, but most judges actively encourage the parties to at least try to settle their case. Under the Federal Rules of Civil Procedure, early on in the life of the case, before any discovery can be conducted, the parties’ representatives must meet and confer about a variety of topics, one of which is the possibility of settlement. At the initial case management conference before the judge, many judges will make a point to ask whether there have been any settlement discussions and to encourage the parties to discuss settlement sooner rather than later. Some courts will set a specific date in the pretrial scheduling order by which the parties must have met and discussed settlement.
Formal settlement conferences can be scheduled with magistrate judges or appointed pro tem judges, depending upon the court at the request of the parties. These can be held at any time during the litigation process. And, of course, the parties can voluntarily agree to participate in a private mediation in an attempt to settle their dispute.
In some cases, there can be a race to the courthouse with the plaintiff filing an infringement case in one forum and the defendant filing a declaratory judgment action in another forum. This may happen because the parties would prefer to litigate in their “home” forum or because they perceive that the interpretation of an important issue in the case will be more favourable to their position in one forum versus another. In these instances, courts tend to follow the “first to file rule” unless it determines that the earlier filed action was an improper, anticipatory lawsuit. Under the first to file rule, the second court may dismiss or stay its case pending the resolution of the earlier filed suit, or it may elect to transfer the case to the other court if that court would have jurisdiction over the claims and parties.
In theory, under the doctrine of primary jurisdiction, a court might stay its case in favour of a parallel action involving the validity or registrability of a mark before the TTAB where there is need to resolve an issue that has been placed by Congress within the jurisdiction of an administrative body. In most cases, however, the opposite holds true, and the TTAB will stay its action pending resolution of a court case that involves any issue that would be dispositive in the TTAB action.
In an infringement case, a prevailing trade mark owner is potentially entitled to recover actual damages, injunctive relief and/or statutory damages.
Actual damages include the defendant’s profits attributable to the infringement, any lost sales or other direct harm to the plaintiff, and the costs of the lawsuit. When seeking the defendant’s profits, once the plaintiff offers evidence of the value of the defendant’s sales, the burden is placed on the defendant to prove any proportion of his total profits which may not have been due to use of the infringing mark.
Preliminary and permanent injunctions barring the defendant from any future infringing uses of the trade mark are available in infringement cases as equitable remedies. Indeed, a permanent injunction is typically the standard remedy in trade mark infringement cases. Before a court may grant a permanent injunction, the plaintiff must show: that it has suffered an irreparable injury; that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and that the permanent injunction serves public interest.
The Lanham Act also provides for the election of statutory damages as an alternative to actual damages in a counterfeiting case. The plaintiff can elect to recover statutory damages of between USD1,000 and USD200,000 per counterfeit mark per type of goods or services. The statutory damages can be increased to a maximum of USD2 million, or a plaintiff’s actual damages can be increased by up to three times, if the counterfeiting is found to be wilful or intentional.
Generally, the parties are each responsible for paying their own legal fees. However, in “exceptional cases,” the federal trade mark statute allows courts to award a prevailing party its reasonable attorney’s fees. When evaluating whether a case is “exceptional,” the court considers several factors, including frivolousness, motivation, objective unreasonableness (both in the factual and legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence. A case is deemed “exceptional” if it stands out from others with respect to the substantive strength of a party's litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. An award of attorney fees is mandatory in a case where intentional trade mark counterfeiting is proven, unless there are extenuating circumstances.
Courts have the power to award attorney's fees in Lanham Act cases to prevailing defendants if the case is determined to be “exceptional”. A case is not an exceptional case and attorney fees will not be awarded if the plaintiff had a seemingly meritorious claim of trade mark infringement which was not brought in bad faith, but the plaintiff nevertheless lost on summary judgment or at trial. Generally, if the plaintiff pursues a claim it should have known was without merit, attorney fees may be awarded to the prevailing defendant. Unreasonable conduct during litigation can also be a basis for an award of attorney fees to a prevailing defendant.
The remedies are generally the same for all types of trade marks. As noted above, the Lanham Act provides for additional special remedies for counterfeiting cases. Treble damages or profits and a reasonable attorney's fee must be awarded to an infringed trade mark owner if the defendant counterfeiter knew that the goods were counterfeit and intended to offer them for sale.
Trade mark cases may be appealed to the federal appellate circuit court for the jurisdiction of the trial court. A preliminary injunction ruling may be appealed immediately. Any other issue before the court generally may not be appealed until there is a final ruling,
Both legal and factual issues may be raised on appeal in a trade mark case. Factual findings are reviewed under the “clear error” standard. Legal conclusions are reviewed de novo, without any deference to the trial court’s legal rulings.
The time period for an appeal depends on the complexity of the issues and the appellate court’s docket. It is not unusual for the appeals process to take one to two years before an appellate decision is rendered.
The likelihood of dilution of a famous mark, through tarnishing or blurring, is grounds for an injunction in court. Likewise, within the first five years after registration of the allegedly dilutive mark, it may be asserted as a basis for cancelling the registration.
Under the “famous marks” doctrine, if a mark used only on products or services sold abroad is so famous that its reputation is known in the United States, then that mark may be protected in the United States, but it depends upon where the case is filed. Some United States courts (such as the Ninth Circuit) recognise the “famous marks” doctrine, while other courts (such as the Second Circuit) explicitly reject the doctrine.
A geographical indication is usually defined as a designation that indicates that goods have a specific geographical origin. The United States views geographical indications as a subset of the law of trade marks, protectable as certification marks or collective marks. In the United States, since both trade marks and geographic indicators are within the system of common law and registered trade marks, conflicts are resolved using the concepts of priority and likelihood of confusion.
There is no protection for generic geographic terms that consumers would view as designating a category of goods or services of the same type.
A certification mark does not designate the source of a product or service but is instead used to show consumers that particular goods and/or services, or their providers, have met certain standards set by the mark owner. The certifying organisation that owns the certification mark controls who can use the mark and will let others use its certification mark only if the goods, services, or their providers meet the organisation’s standards. The certifying organisation cannot use the mark as a trade mark for goods, or a service mark for services, that the certifying organisation offers to consumers. Certification marks can be registered in the United States.
Under US law, the USPTO will not grant a federal trade mark registration on a mark that would be considered primarily merely a surname, unless the applicant can establish secondary meaning, or “acquired distinctiveness”. In determining whether a mark is primarily merely a surname, the USPTO considers several factors, including: whether anyone connected to the trade mark applicant has that surname, whether the mark is a common surname, whether the mark has any alternative definitions beyond the surname, and whether the mark has the “look and feel” of a surname. Once could be prohibited from using their own surname as a mark if it is likely to cause confusion with a pre-existing mark.
Pre-filing costs vary significantly depending upon the nature and amount of diligence that is undertaken to investigate the infringement, as well as whether any steps are taken to try to engage the infringer in negotiations before filing any lawsuit. A plaintiff must have a good faith basis for filing a complaint in court, so some degree of diligence will be required in order to determine the nature of the infringement and the identity of the infringer if possible. Subject to ethical considerations, an investigator may be hired to collect evidence of the infringement and/or to make a purchase of the infringing goods. Investigative costs could run from several hundred to several thousand dollars.
In some cases, the trade mark owner may elect to commission a consumer survey (likelihood of confusion, secondary meaning or generic nature) prior to filing a lawsuit. A relatively small pilot survey may cost in the USD20-50,000 range whereas a full-blown survey may cost upwards of USD50,000 to over USD150,000 depending on the nature and scope of the survey.
From start to finish, exclusive of appeals, trade mark litigation involves the preparation and filing of the complaint, discovery, pre-trial motion practice, pre-trial preparation, trial, and post-trial motion practice. The total cost varies substantially based upon the importance and value of the trade mark at issue in the case, the total monetary amount in dispute, the complexity of the issues involved, and the geographic location in which the lawsuit is filed. Where there is no settlement, obtaining a final resolution of the dispute can take several years.
According to a study published in the Journal of Marketing, more than 3,000 trade mark infringement cases are filed in US federal district courts each year. See Ertekin, Sorescu, and Houston, Hands off my Brand! The Financial Consequences of Protecting Brands through Trademark Infringement Lawsuits, Journal of Marketing, Vol 82, Issue 5 (2018). Although the majority are settled, those that proceed to trial typically cost between USD375,000 and USD2 million.
Subject to principles of equity, a prevailing trade mark owner is entitled to recover its costs of the action, 15 USC §1117(a). Costs, however, do not include a party’s attorney’s fees but are limited to specific costs outlined by statute, such as the court filing fees, transcript costs and witness fees, 28 USC §1920.
In “exceptional cases,” the court may award reasonable attorney’s fees to the prevailing party, 15 USC §1117(a). In deciding whether any particular case is “exceptional, and, if so, how much to award, the judge has discretion. Historically, attorney’s fees awards were granted only in cases of counterfeiting, wilful infringement, and/or bad faith in the conduct of the lawsuit. More recently, courts have begun to follow the standard announced by the US Supreme Court for patent cases in which they consider the totality of the circumstances to determine if the case is “one that stands out from others with respect to the substantive strength of a party’s litigation position (considering both the governing law and facts of the case) or the unreasonable manner in which the case was litigated”. Octane Fitness, LLC v ICON Health & Fitness, In., 134 S Ct 1749 (2014).
Although most trade mark disputes in the US are still handled by the federal courts, alternative dispute resolution procedures, such as arbitration and mediation, are becoming more common. Many courts now require the parties in civil cases to engage in formal settlement discussions and encourage the use of settlement judges or private mediators to assist the parties. Some maintain a panel of practitioners who can be utilised by the parties for mediation. The American Intellectual Property Law Association and the International Trademark Association qualify and publish their own panels of arbitrators and mediators.
Certain trade marks can also be subject to protection under other forms of intellectual property, such as copyright, rights of publicity, design patent and trade dress protection. Copyright can be used to protect logos if they incorporate a sufficient degree of creative expression. Likewise, copyright may protect works such as jingles, collegiate fight songs and commercial advertising that also serve as trade marks to designate a single source of a product or services.
Rights of publicity are governed by state law and protect an individual’s name, likeness, and persona from unauthorised commercial use. To the extent a person’s name or image serves as a trade mark for a product or service, it may be protected under both trade mark and rights of publicity law. To establish a violation of the right of publicity, no finding of likely confusion is required.
Design patents intersect with trade mark law in the area of product designs. In some cases, an ornamental product design may qualify for both design patent and trade dress protection. Where an ornamental design protected by a design patent has been advertised and marketed in such a way that it also designates a single source of the product, that design may qualify for both design patent and trade dress protection.
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The year 2019 marks the first full year of the United States Patent and Trademark Office (USPTO) being led by Director Andrei Iancu.Over the past year, Director Iancu has recommitted to maintaining and advancing the intellectual property system and ensuring that it remains reliable, predictable and high-quality.
Trade Mark Filings Continue to Increase
In Fiscal Year (FY) 2019 (October 2018 through September 2019), the trend of an increase in the number of trade mark applications continued. FY 2019 saw 673,233 new trade mark applications filed, representing a 5.4% increase over FY 2018. However, despite the increase in trade mark applications being filed, the pendency for both a first action on an application and the total pendency time have decreased from FY 2018. In FY 2019, the average time before a first action on a trade mark application was received was 2.6 months, representing a 23.5% change from the 3.4 month pendency in FY 2018. In addition, this 2.6-month pendency is squarely within the USPTO’s internal target of 2.5-3.5 months between filing of a trade mark application and a first action.
Similarly, the total pendency of trade mark applications decreased from FY 2018, from 9.6 months to 9.3 months, representing a decrease of 3.1%. This shows that the USPTO is succeeding in its commitment to reducing the amount of time a trade mark application is pending. The USPTO internal target for total pendency is 12 months, meaning that trade mark examining attorneys are currently issuing trade marks almost three months ahead of their target.
In FY 2019, 67.8% of new applications for trade marks were filed by United States residents, with the remaining 32.2% being filed by residents of foreign countries. In addition, a total of 297,774 Certificates of Registration were issued in FY 2019. It should be noted that this number includes both applications that were filed in FY 2019 and applications that were filed prior to FY 2019 but did not have statements of use filed until FY 2019.
Other Targets Being Met by Trade Mark Examining Corps
One major way the USPTO measures its success is through the use of targets. From targets pertaining to the amount of time a trade mark application is pending to targets relating to the quality of the Office Actions issued, these numerical benchmarks provide a concrete way to both evaluate the overall success of the USPTO and provide realistic advice to clients regarding the time it will take their applications to go through examination.
In addition to beating the target pendency times for trade mark Office Actions and total pendency, compliance rates for both first Office Actions and final compliance were exceeded. The FY 2019 target compliance rate for first Office Action compliance was 95.5%, while the actual compliance rate was 96.4%, meaning that 96.4% of first Office Actions issued by the USPTO without substantial errors made, without substantial issues missed, and without substandard review. Similarly, the FY 2019 target final compliance rate was 97%, with the actual final compliance rate coming in at 97.4%. The target final compliance rate represents the total number of cases without substantial decision-making errors. Overall, the examining attorneys at the USPTO exceeded both their pendency and quality targets for the 14th consecutive year.
Another target relates to the number of trade mark applications filed electronically.The USPTO is moving towards entirely electronic filing through the implementation of a new rule mandating electronic filing, although the rule’s implementation was delayed until 21 December 2019. In FY 2019, the USPTO sought to have 88% of trade mark applications processed electronically. This target was surpassed, with 88.4% of trade mark applications being electronically processed.
USPTO Takes Action to Reduce Fraudulent Filings
An ongoing challenge for the USPTO is combating fraudulent or other bad faith filings. In an effort to address this problem, the USPTO is taking action through a combination of regulatory, operational and administrative actions.
Several things may indicate bad faith filings. One relates to specimens of use. Specimens may be fake or altered (eg, a superimposed logo on a generic good). Additionally, along with the submission of the specimen may be a false claim of use in United States commerce.
Another indicator of bad faith filing may lie in who filed the application. The USPTO has seen an increase in filings that appear to be pro se but are actually filed by unauthorised individuals from the filing country. In addition, at least one country offers financial incentives to its citizens to encourage out of country filings. While many foreign filings are legitimate, bad faith and fraudulent filings do cost the USPTO money and reduce the accuracy of the trade mark register.
Perhaps the most significant action taken by the USPTO to combat these fraudulent filings is the enactment of a new United States Counsel rule. Effective 31 August 2019, the USPTO began requiring trade mark applicants, registrants, and parties before the Trademark Trial and Appeal Board (TTAB) who are not domiciled in the United States to retain United States counsel. The United States counsel will then be listed before the USPTO as it pertains to the matter, making the United States counsel responsible for the application and any other matters. In addition, the USPTO has begun requiring all trade mark applications and other documents to be filed through myuspto.gov.
Examining attorneys have also been given the right to refuse registration based on specimens. If a specimen looks suspicious (eg, digitally altered or marked), the examining attorney is able to refuse registration based on those grounds. A less drastic option has also been included; the examining attorney may initially request more information regarding use of the mark on a specimen and, based on the response received, may either allow or refuse registration.
In addition, the USPTO has begun developing a specimen database. The specimen database is intended to be searchable and will help to detect when the same image has been used by multiple applicants for different marks.
The USPTO has also revised the declaration used by an applicant when filing an application. The declaration includes sworn statements regarding the ownership and the use of the mark on the applied-for goods and/or services. In revising the declaration, the USPTO moved towards a “plain English” version, with the intent of increasing the readability and understandability for non-attorneys. Further, the revised declaration includes required checkboxes to make it easier for a non-attorney applicant to read and confirm.
The most extreme action taken by the USPTO involves exclusion orders. Mary Boney Denison, the Commissioner for Trademarks, has excluded certain foreign practitioners from appearing before the USPTO when appropriate. Although this is intended to be a rare action, it does remain an option the USPTO is able to exercise.
USPTO Increases Random Audits to Enhance Accuracy of the Trade Mark Registry
As part of its ongoing effort to maintain an accurate registry of trade marks, the USPTO increased the number of random audits for registered marks. The USPTO requires maintenance documents to be filed between the fifth and sixth year after registration, and then every ten years after the date of registration. The USPTO randomly audits these maintenance documents and asks for additional proof of use for two additional goods or services in each class.
Upon receiving such a post-registration audit, the registrant is required to respond with the requested proof. The registrant is also required to delete any goods or services, even if they are not requested as part of the audit, that are not currently being used by the registrant. If the registrant provides such proof, the USPTO audit is satisfied and the registration is maintained. If, however, the registrant responds without the requested proof, the USPTO will request proof of use for all goods and services listed in the registration.
Through these audits, the USPTO has found that over 60% of the audited registrations have at least one good or service that needs to be deleted due to non-use. In an effort to continue to improve the accuracy of the trade mark register, the USPTO doubled the number of audits to 5,000 per year.
Trade Mark Trial and Appeal Board Begins Cancellation Pilot Programme
In another example of the USPTO’s commitment to increasing the accuracy of the trade mark register, the TTAB began an expedited cancellation pilot programme. The programme uses existing Accelerated Case Resolution (ACR) tools to expedite cancellation proceedings involving abandonment and non-use claims. Over 160 cases were identified as being eligible for the programme, and almost 90 conferences were held involving the parties, the TTAB interlocutory attorneys, and the Administrative Trademark Judges. As a result, parties in 15 of the cases agreed to use some form of ACR, while many others agreed to consider the possibility of participating in the pilot programme but did not make an official decision. With 1,123 pending cancellation proceedings before it as of 30 September 2019, this new expedited cancellation pilot programme could help reduce the workload of the TTAB as it relates to this aspect of their job.
United States Supreme Court Rejects Prohibition on Immoral and Scandalous Trade Marks
On 24 June 2019, the Supreme Court handed down its decision in Iancu v Brunetti, addressing whether, in light of its previous holding in Matal v Tam, the Lanham Act’s prohibition on registration of “immoral” and “scandalous” trade marks represents a violation of the First Amendment. Six justices joined the majority opinion, which held that both the immoral and the scandalous provisions of the Lanham Act do not square with the First Amendment and, thus, must be invalidated.
Respondent Erik Brunetti founded a clothing line that uses the trade mark and brand name "FUCT". When Brunetti attempted to register his trade mark with the USPTO, the registration was denied on the grounds that the mark was “a total vulgar” and therefore could not be registered. Brunetti appealed, arguing that, particularly in light of Tam (which held that the disparagement clause of the Lanham Act represented a First Amendment Violation), the Lanham Act’s exclusion of immoral and scandalous marks as eligible for federal registration by the USPTO also represented unconstitutional viewpoint discrimination.
The government argued that the ban on such marks was viewpoint-neutral and, in any case, could be constructed in a limiting way such that the only prohibition would be to marks that are offensive or shocking due to their mode of expression, regardless of the views presented by the marks. Doing this, according to the government, would result in only vulgar (lewd, sexually explicit, and profane) marks being refused registration, which would make the prohibition constitutional.
The Supreme Court disagreed, explaining that “the statute says something markedly different”. The Lanham Act, as written “does not draw the line at lewd, sexually explicit, or profane marks…[or] refer only to marks whose 'mode of expression', independent of viewpoint, is particularly offensive.” Moreover, the Supreme Court explained, while the Lanham Act clearly has a legitimate purpose, it is still not permitted to engage in viewpoint-based discrimination. As an illustration, the Supreme Court pointed to several contradictions by the USPTO when it came to attempts to register a trade mark ("KO KANE" rejected as a trade mark for beverages while "SAY NO TO DRUGS—REALITY IS THE BEST TRIP IN LIFE" registered; "BONG HITS 4 JESUS" refused registration due to the belief that “Christians would be morally outraged” but "JESUS DIED FOR YOU" registered for use on clothing).
Between Tam and Brunetti, the Lanham Act has now lost its ability to exclude a wide swath of potential trade marks. Previously, Examining Attorneys with the USPTO were permitted to refuse registration of a trade mark, even if it was not phonetically equivalent to a curse word (as in the present case), if the Examining Attorney felt that the trade mark was, or could potentially be, offensive or outside the “accepted” viewpoint. This is why "BONG HITS 4 JESUS" was refused registration but "JESUS DIED FOR YOU" was allowed; as the Supreme Court opinion notes, one mark suggests irreverence while the other suggests religious faith and, while some may find the first mark offensive, it is not the place of the USPTO to police what is and is not objectionable. As a result, marks that are disparaging, explicit, immoral, and/or scandalous are now eligible for registration with the USPTO. Of course, any trade mark application must still go through the examination procedure; however, the content that makes up the application may no longer be used as the sole reason for refusing registration.
Supreme Court Considers Whether Wilfulness is a Prerequisite for Award of Infringer’s Profits
The United States Supreme Court took up the question of wilfulness in infringement when determining whether a trade mark owner is eligible to receive the infringer’s profits under the Lanham Act. More particularly, in Romag Fasteners Inc, v Fossil, Inc et al, the Supreme Court is asking whether, under Section 35 of the Lanham Act, wilful infringement is a prerequisite for an award of an infringer’s profits for a violation of Section 43 of the same act (relating to false designation of origin and infringement liability).
Romag sells patented magnetic snap fasteners under the registered trade mark ROMAG®, with the fasteners being used as closures in wallets, handbags, and similar products. In 2002, Fossil, Inc (“Fossil” is used to refer to the parties as a whole) entered into an agreement for Fossil to use ROMAG® fasteners in their products. The agreement included the provision that Fossil would instruct its manufacturers in China to only purchase fasteners from the sole authorised ROMAG® fastener manufacturer in mainland China. Between 2002 and 2008, Fossil (through its manufacturer Superior Leather) purchased, at a minimum, tens of thousands of ROMAG® fasteners. However, between 2008 and 2010, the number of ROMAG® fasteners purchased declined noticeably.
In 2010, the president of Romag discovered that some Fossil bags being sold in the United States had counterfeit snaps bearing Romag marks. Romag brought suit against Fossil that same year, alleging both patent and trade mark infringement. A jury found that Fossil had, in fact, infringed Romag’s trade mark, falsely represented the products as coming from the same source, and had infringed Romag’s patents; however, the jury also found that none of Fossil’s violations were wilful. Nevertheless, the jury did find that Romag should be awarded USD6.7 million in profits to deter future infringement by Fossil, saying that Fossil acted with “callous disregard” for Romag’s trade mark rights.
However, the portion of damages relating to profits was struck during a bench trial addressing the equitable defences and remedies, with the district court saying that Romag had not proven that infringement was wilful and thus was not entitled to profits. Five Circuit Courts of Appeal, including the Federal Circuit, require a plaintiff to show wilful infringement in order for the plaintiff to even have the opportunity to recover the infringer’s profits. Six Circuit Courts of Appeal, meanwhile, make the infringer’s profits available without requiring the plaintiff to show and prove wilfulness. The intent remains a factor in fashioning an equitable remedy, and the wilfulness of the infringement is certainly considered, but it is only one factor among many. And one circuit, the First Circuit Court of Appeal, takes a hybrid approach, requiring a showing of wilfulness in infringement only when the parties are not direct competitors.
Naturally, Romag argues that an absolute requirement to prove wilfulness in order to recover profits is the incorrect approach. Romag points to the direct language of the Lanham Act, which says that profits are available, subject to “principles of equity” for, inter alia, “a violation under Section 1125(a) [relating to false designation of origin] or (d) [relating to liability under a bad faith intent to profit off a mark] of this title, or a wilful infringement under Section 1125(c) [relating to dilution or blurring of a mark] of this title.” According to Romag, while wilfulness may be required in some cases, it is not to be applied to all instances of trade mark infringement.
Fossil, by contrast, points to the history of the Lanham Act, arguing that the original language relating to principles of equity was understood generally to wilfulness requirements. The fact that the “wilful violation” language was added later, says Fossil, does not change the original intent and understanding of equitable principles. Since those remedies had wilfulness requirements, argues Fossil, the modern statute should have the same.
Broadly speaking, there are three possible outcomes for this case. One is that wilfulness is never to be considered when determining whether to award an infringer’s profits; under this result, profits would always be available (subject to other portions of the Lanham Act). A second outcome would be imposing the requirement that wilfulness must be proven by a plaintiff in order to recover any profits from an infringer. The third outcome would be somewhere in the middle; wilfulness may not be required to be proven but may be considered as a factor in determining whether to award profits. Under this outcome, a showing of wilfulness may be entitled to significant weight in determining whether to award an infringer’s profits, but the decision to do so would not necessarily rise or fall based on wilfulness. Regardless of which approach the Supreme Court takes, this case is certainly going to affect how wilfulness is argued in trade mark infringement cases.
Romag Fasteners Inc, v Fossil, Inc et al was argued on 14 January 2020. A decision in the case is expected by June 2020.
Supreme Court Takes Up Defence Preclusion in Trade Mark Case
On 13 January 2020, the United States Supreme Court heard arguments in Lucky Brand Dungarees, Inc et al v Marcel Fashion Group, Inc, a case involving the principle of res judicata. Essentially, the Supreme Court will be deciding whether res judicata includes “defence preclusion”.
The case arises from an ongoing dispute over the trade marks LUCKY BRAND®, owned by Lucky Brand Dungarees, Inc. et al (collectively referred to as Lucky), and GET LUCKY®, owned by Marcel Fashion Group, Inc (Marcel). Marcel first sued Lucky in 2001 over Lucky’s use of “Get Lucky”; what followed was a series of lawsuits in which Lucky and Marcel sued each other over the use of “Get Lucky” and LUCKY BRAND®. In 2010, a final judgment and order enjoining Lucky from using the phrase “Get Lucky” was entered; however, in 2011, Marcel sued Lucky again, seeking a new injunction to prohibit Lucky from using LUCKY BRAND® marks (which are registered and owned by Lucky).
At the beginning of the 2011 suit, the district court granted summary judgment in favour of Lucky, saying that the cause of action for the suit was the same as the suit that resulted in the 2010 judgment, trade mark infringement over the various “Lucky” marks. The Second Circuit Court of Appeals disagreed, saying that because the 2010 judgment did not include a provision barring subsequent suits for further infringement, summary judgment was inappropriate. On remand, Marcel argued that Lucky was precluded from relying on the settlement agreement as a defence to infringement, saying that Lucky could have raised the same defence during the previous lawsuit. The district court disagreed, finding that because the applicability of the settlement’s release provision was not actually litigated in the previous lawsuit, there was no claim preclusion, since Marcel was asserting different claims against Lucky and Lucky was not asserting a claim against Marcel. The Second Circuit again overturned the district court, saying that claim preclusion principles apply to defences, making Lucky unable to use the settlement agreement as a basis for a defence. It is this holding that the Supreme Court is reviewing.
Lucky points out that, in serial litigation between two parties, such as is present here, the time-tested principles of claim preclusion and issue preclusion govern when parties may, and may not, litigate issues that were, or could have been, litigated in a prior case. Lucky argued that the Supreme Court has held that, in a subsequent case between the same parties involving different claims from those litigated in the earlier case, the defendant is free to raise defences that were not litigated in the earlier case, even though they could have been. The Federal Circuit, Eleventh Circuit, and Ninth Circuit have all held the same in recent years. Their reasoning is straightforward: claim preclusion does not bar such defences, because the claims in the second case arise from different transactions and occurrences from the first case, and issue preclusion does not bar them either, because they were never actually litigated.
Lucky asserts that the Second Circuit has now held the opposite in this case. According to Lucky, defence preclusion does not apply when the claims in the second suit are different from the claims in the first suit. Central to Lucky’s argument is the premise that the claims here are different, because Marcel is seeking damages for sales of goods that occurred post-judgment. That being so, according to Lucky, the only form of preclusion that might apply is issue preclusion, which bars re-litigation only of those issues that were actually litigated and necessarily decided.
Marcel asserts that Lucky’s argument is wrong. Although the causes of action in the 2005 suit and this suit are the same for res judicata purposes, Marcel may seek relief for continuing sales in this successive lawsuit for one basic reason: In the earlier case, Marcel lacked the opportunity to litigate Lucky’s liability for post-judgment conduct; that is, it lacked an opportunity to obtain damages for sales that had not yet occurred. That is the case here. Marcel alleges that Lucky and its affiliates “have continued to wilfully infringe upon [Marcel’s] get lucky mark by using the lucky brand marks in the identical manner and form, and in connection with the identical goods for which they were found liable” in the 2005 action.
Although the ruling will have applicability beyond trade mark infringement, the fact is that the result in Lucky Brand Dungarees, Inc et al v Marcel Fashion Group, Inc will nonetheless have significant impacts on how trade mark infringement cases are litigated and defended, particularly in circumstances of ongoing infringement. The applicability of defence preclusion in a particular case may result in alleged infringers asserting any possible defence in a case, even if the defence is not applicable at that time, for fear that if they do not, they will not be able to if another cause of action arises.
The case was argued on 13 January 2020, and a decision is expected by the end of June 2020.