20th Class

1
20th Class

• Distribute
• Sign-in sheet
• Slide handouts
• Next assignment
• Voice Recorder on
• Agenda
• Trademark
• Acquisition and Priority
• Infringement
• Next class
• Dilution

2
Review

• Functional features are not protected by
  trademark
• Purpose is to promote competition
• 2 kinds of functionality
• Utlitarian functionality
• Feature is functional if it is essential to use
  or purpose of article or if it affects the cost
  or quality of the article. TrafFix
• No need to consider alternatives
• Aesthetic functionality
• If competitor needs to copy aesthetic feature in
  order to compete, that feature may be
  aesthetically functional
• Feature if aesthetically function if exclusive
  use ... would put competitors at a significant
  non-reputational disadvantage."

3
Acquisition Priority

• When does company acquire exclusive rights to use
  mark?
• Preliminary assumptions
• No registration, national market
• Basic idea is "first use" rule
• Registration does not confer rights
• see 1, "owner of trademark ...may apply to
  register
• Priority (w/ exceptions that will discuss later)
  follows first acquisition
• sec 2d. cannot registered if confusingly
  similar to mark already in use
• even if senior mark not registered
• concurrent registration possible
• but rare
• 2 basic alternatives
• 1) when register mark
• 2) when use mark
• Both of these alternatives are or have been used
• Europeans use 1st
• US is/was mostly 2nd
• but recently modified
• Which better?

4
Intent to Use Registration

• New to 1988 revisions
• Applicant files application to register, 1b,
• 6 months later must file affidavit that actually
  in use, 1d
• May file for extensions, up to 3 years
• 6 months automatic, then 2 more years w/ good
  cause
• Registration is issues after affidavit of use
• BUT priority is established by date of filing,
  see 7c
• if registration granted, filing of application to
  register constitutes "constructive use"
• and use is what gives priority
• 7c is key to intent to use, it is what makes
  intent to use registration at all worthwhile
• Hypo
• June1, A files intent to use application for mark
  BRAVO on cheese
• July 1, B starts using BRAVO mark on yogurt
• Nov 1, A starts shipping cheese
• Nov 15, A files affidavit that has used in
  commerce
• Jan 1, PTO registers mark
• Feb 1, A sues B
• A has priority

5
Procedure

• Person wanting to register mark sends in
  application to Patent trademark office
• PTO reviews. awards registration if criteria met
• Part of PTO procedure is publication in Official
  Gazette
• those who think they may be injured to file an
  opposition
• If application denied, then appeal to Trademark
  Trial and Appeals Board
• then appeal on administrative record to US Court
  of Appeals
• or de novo review in district court
• 14. For 5 years after registration
• Opponent or defendant can attempt to get
  cancelled or defend against infringement suit on
  any ground that would have precluded initial
  registration
• 14 -15. After 5 years, can become
  "inconstestable"
• Owner must file affidavit of continuous use
• Opponent or defendant can no longer argue
• descriptive and no secondary meaning
• confusingly similar to another mark in use before
  registration
• BUT can still make other arguments generic,
  scandalous, abandoned

6
Geography

• Common law
• First user, known as senior user owned the mark,
  could prevent others from using it
• BUT subsequent user, known as junior user, had
  defense if had used in good faith in remote area
• Good faith usually meant without notice
• If A had used mark in New York, and B later began
  using mark in California, if B did so w/o notice
  (in good faith), A could not enjoin B.
• if B had notice, then A could get injunction
• In practice, could only prove notice if senior
  user used mark in same area as junior
• So common law only protected TM owner in areas
  where marked actually used
• Zone of natural expansion doctrine
• If A used mark in New York City, and B began
  using mark in northern New Jersey w/o notice, A
  might be able to enjoin B on theory that northern
  NJ was natural zone of expansion
• Federal registration is constructive notice 22
  
• Since common law did not protect remote user who
  had notice, constructive notice gives nationwide
  protection
• Note dependence of statute on common law

7
Question

• 1966. Preco uses term Porcelainate
• Porcelainate is descriptive
• 1977. Ceramco uses Percelainate
• 1979. Ceramco begins advertrising campaing
• established 2ndary meaning
• 1980. Preco began advertising campaign
• established 2ndary meaning
• 1981. Ceramco sues Preco for trademark
  infringement

8
Question

• 11/89. In-Wear files ITU (intent to use
  application) for Body Gear, advertises but does
  not sell
• 12/89. Shalom files ITU for Body Gear
• 2/90. Shalom uses and sells clothing with Body
  Gear logo
• 3/90. Shalom sues In-Wear to enjoin In-Wears
  proprosed sales of Body Gear clothing

9
Infringement

• 2 kinds of infringement
• Traditional infringment (based on confusion)
• Dilution
• Traditional infringement
• 32(1). Any person who shall, without the
  consent of the registrant (a) use in commerce any
  reproduction, counterfeit, copy, or colorable
  imitation of a registered mark in connection with
  the sale, offering for sale, distribution, or
  advertising of any goods or services on or in
  connection with which such use is likely to cause
  confusion, or to cause mistake, or to deceive
  shall be liable in a civil action
• 43(a)(1). Any person who, on or in connection
  with any goods or services, or any container for
  goods, uses in commerce any word, term, name,
  symbol, or device, or any combination thereof, or
  any false designation of origin, false or
  misleading description of fact, or false or
  misleading representation of fact, which (A) is
  likely to cause confusion, or to cause mistake,
  or to deceive as to the affiliation, connection,
  or association of such person with another
  person, or as to the origin, sponsorship, or
  approval of his or her goods, services, or
  commercial activities by another person shall
  be liable in a civil action

10
AMF

• Likelihood of confusion, not actual confusion
• Competing goods infringement usually will be
  found if the marks are sufficiently similar that
  confusion can be expected
• Related but not competitive goods -- 8 factor
  test
• 1. strength of the mark
• 2. proximity of the goods
• 3. similarity of the marks
• 4. evidence of actual confusion
• 5. marketing channels used
• 6. type of goods and the degree of care likely to
  be exercised by the purchaser
• 7. defendant's intent in selecting the mark and
• 8. likelihood of expansion of the product lines
• Unrelated goods -- no infringement because
  confusion is unlikely
• Klerman. But may be dilution
• Note. Some courts use 8 factor test even for
  competitive goods

11
Types of Confusion I

• Source confusion consumer buys wrong product
  (e.g. buy product thinking it is genuine brand A
  or has certain attributes associated with Brand
  A, when it is not).
• Sponsorship confusion consumer buys product
  thinking it is sponsored by or affiliated with A
  when it is not
• E.g. misuse of Olympic symbol
• Initial interest confusion consumer goes to
  store or looks at product because of misuse of
  trademark
• E.g. Sams burger shack erects large Golden
  Arches above store near freeway.

12
Types of Confusion II

• Third party confusion consumer was not
  confused, but those who see product may be
• E.g. fake Rolex watch, Ferrari kit
• Also called Post-sale confusion
• Reverse confusion Consumers believe that
  original, legitimate trademark is actually that
  of successful junior, infringing mark
• Big O Tire Dealers (net worth approx. 200K) makes
  Big O Big Foot tires
• Did not register
• Goodyear (worlds largest tire mfg) used term
  Bigfoot in advertising its new custom
  polysteel radial tires

13
Homework Questions

• 1) Listerine sells its mouthwash in a bottle
  whose shape is shown below. Ralphs grocery
  store markets a mouthwash with the same formula
  and color as Listerines in a bottle whose shape
  is identical. The label on Ralphs mouthwash
  says Ralphs Mouthwash, compare to Listerine.
  Ralphs places its mouthwash next to Listerine on
  the shelves of its stores. Has Ralphs infringed
  Listerines trademarks under the legal test set
  out in AMF? Are consumers likely to be confused?
  What is best for consumers?

• 2) Vons makes mouthwash with same ingredients as
  Listerine. It is identical in every way. Not
  even an expert with access to a full chemistry
  lab can tell the difference. Vons packages its
  mouthwash in a bottle which looks identical to
  Listerines, including the label, which
  prominently displays the word LISTERINE.
  Listerine sues Vons and receives an injunctions.
  Is the injunction in consumers interest?

14
Additional Question

• Bristol Meyers introduces Excedrin PM
• McNeil Pharmaceuticals introduces Tylenol PM
• Packaging similar
• Solid color, which fades from dark at top to
  light at bottom
• Pictures of tablets at bottom
• But different color schemes for packaging
• Excedrin PM tablets blue, capsules green
• Tylenol PM -- tablets green, capsules. Blue
• Also, words on packaging different
• Excedrin PM // Tylenol PM
• Infringement?

15
Dilution

• Only famous marks
• Blurring
• Use of same (or similar?) trademark on unrelated
  goods
• Kodak aspirin, DuPont shoes
• Lexus / Lexis
• Tarnishment
• Use of mark which undermines positive consumer
  association, especially by associating it with
  immorality
• Enjoy Cocaine
• Pornographic movie using actresses in Dallas
  Cowboys uniforms