Protect Your Trademark and Service Mark

Protectability of Mark

Equibrand Corporation v. Reinsman Equestrian Products, Inc. and Dale R. Martin, 2007 U.S. Dist. LEXIS 36229 (United States District Court for the Northern District of Texas, Dallas Division). According to Equibrand, to determine whether a mark is protectable, a court must assign the mark into one of five categories, which, arranged in order of increasing distinctiveness, are: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful.” A surname is generally regarded as “descriptive” by the 5th Circuit, which is distinctive only if it has acquired a secondary meaning. Canon Props, 752 F 2d at 155.

In order for a party to prevail under the Lanham Act, a party must first show that the word or phrase in dispute is registerable or protectable. Zatarians, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786,790 (5th Cir. 1983). March Madness Athletic Ass’n v. Netfire, Inc., 310 F. Supp. 2d 786, 806, (N.D. Tex. 2003). After protectability is established, a Plaintiff must prove the likelihood of confusion. A mark is protectable if it is either (1) inherently distinctive or (2) has acquired distinctiveness through secondary meaning. Two Pesos Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769, 112 S. Ct. 2753, 120 L.Ed.2d 615 (1992).

Secondary Meaning

A trademark has successfully acquired a secondary meaning when “in the minds of the public, the primary significance of a product feature or item is to identify the source of the product rather than the product itself. Secondary meaning is a term of art in trademark law. It refers to the situation which arises when a company has a mark which might ordinarily be ineligible for protection were it not for the fact that the name has come to be closely associated, (in a distinct market), with a particular manufacturer’s product or service.

In order to establish a secondary meaning for a term, a plaintiff must show that the primary significance of the term in the minds of the consuming public is not the product by the producer. The burden of proof to establish secondary meaning rests at all times with the plaintiff; this burden of proof is necessary to establish secondary meaning for a descriptive term. The mark must denote to the consumer “a single thing coming from a single source,” to support a finding of secondary meaning. Both direct and circumstantial evidence may be relevant and persuasive on the issue. Factors such as amount and manner of advertising, volume of sales, and length and manner of use may serve as circumstantial evidence relevant to the issue of secondary meaning. While none of these factors alone will prove secondary meaning, in combination they may establish the necessary link in the minds of the consumers between a product and its source. It must be remembered, however, that the question is not the extent of the promotional efforts, but their effectiveness in altering the meaning of the term to the consuming public. Zatarians, Inc. v. Oak Grove Smoke-House, Inc., 698 F.2d 786; 1983 U.S. App. LEXIS 30159 (Feb. 25, 1983).

Survey evidence is the most preferred and persuasive manner to establish secondary meaning. However, other factors, taken together, may also establish that a mark has achieved secondary meaning, these factors include: (1) length and manner of use of the mark by Plaintiff; (2) nature and extent of advertising and promotion of the mark; (3) efforts made to promote and conscious connection in consumers mind between mark and particular product or service; and (4) Defendant’s intent to copy the mark.


What Constitutes Registered Mark?

Federal registration of a mark “including a surname” creates a presumption that the mark is distinctive. Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 876 (9th Cir. 1999); Lois Sportswear, USA, Inc. v. Levi Straus & Co., 799 F.2d 867, 871 (2nd Cir. 1986). Union National Bank states “the ownership of a trademark is established by use, not by registration. The first one to use the mark is generally held to be the “Senior” user and is entitled to enjoin junior users from using the mark, or one that is deceptively similar to it, subject to limits imposed by senior user’s market and natural area of expansion.” Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d 358, 364-65 (2nd Cir. 1959) (owner of mark not able to enjoin its use by others in area where owner not likely to expand).

Union National Bank of Texas, Laredo, Texas v. Union National Bank of Texas, Austin, Texas, 909 F.2d. A senior user may not exclude others in areas where he does not currently do business nor is likely to do business in the future. Citing, Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F. 2d 358, 364-65 (2d Cir. 1959).

Confusion Related to a Mark

The touchstone of infringement inquiry is whether or not Defendant’s use creates confusion as to “source, affiliation, or sponsorship” of Defendant’s goods because of its purported likeness to Plaintiff’s goods. Pebble Beach Co. v. Tour 18 I, Ltd., 155 F. 3d 526, 543 (5th Cir. 1998).

The 5th Circuit has enumerated the following list of non-exhaustive factors, no single one being dispositive, to determine whether likelihood of confusion exists (1) type of mark allegedly infringed; (2) similarity between 2 marks; (3) similarity of products or services; (4) identity of retail outlets and purchasers; (5) identity of advertising media used; (6) the Defendant’s intent; and (7) evidence of actual confusion. Taco Cabana Int’l, Inc. v. Two Pesos, Inc., 932 F. 2d 1113, 1122 n.9 (5th Cir. 1991) aff’d sub nom. See also, Two Pecos.

The first element, type of mark infringed, focuses on the strength of the mark. Strength of a service mark for purposes of analyzing likelihood of confusion is dependent on both placement of mark on spectrum of distinctiveness and the extent to which the consumers in the relevant market place recognize the mark as an indicator of source.

Similarity of the mark is determined by comparing the marks “appearance, sound and meaning.” The relevant inquiry is whether, under the circumstances of the use, the marks are sufficiently similar and that prospective purchasers are likely to believe that the two users are somehow associated. The greater the similarity between products, the greater the likelihood of confusion between marks.

Irreparable Injury

In a trademark case, a plaintiff may show irreparable injury by establishing a substantial likelihood of confusion. When a likelihood of confusion exists, the plaintiff’s lack of control over the quality of the defendant’s goods constitutes immediate and irreparable harm, regardless of the actual quality of the goods. The injury lies in the fact that the plaintiff no longer can control its own reputation and goodwill.

Injunctive Relief

To obtain preliminary injunction, moving party must demonstrate (1) substantial likelihood of success on merit; (2) substantial threat of irreparable injury if injunction not granted; (3) threatened injury to Plaintiff must outweigh threatened injury to Defendant; and (4) granting of preliminary injunction serves public interest. See, Cherokee Pump & Equipment, Inc. v. Aurora Pump, 38 F.3d 246, 249 (5th Cir. 1994). If the moving party cannot prove all four elements then the court must deny injunctive relief since the decision to grant preliminary injunction is the exception rather than the rule. Miss. Power & Light Co. v. United Gas Pipe Line Co., 760 F.2d 618, 621 (5th Cir. 1985).

Union National Bank of Texas, Laredo, Texas v. Union National Bank of Texas, Austin, Texas, 909 F.2d 839 (5th Cir. 1990). The owner of a federally registered mark is only entitled to injunctive relief in the market it actually serves plus its “natural zone of expansion.” He may not enjoin others from using the mark if the likelihood of confusion between his product and the infringer’s is minimal or non-existent, such as where the parties to the action use the mark in totally different markets, or for different products. The “zone of expansion” doctrine represents a conundrum within the conundrum of trademark law. There is no established definition. A party seeking an injunction for trademark infringement must clear several hurdles in order to prevail. First, he must prove that the name he seeks to protect is eligible for protection. He must then prove he is the senior user. Having proven these elements he must then show a likelihood of confusion between his mark and that of the defendant. Finally, because he is asking for the equitable remedy of an injunction, he must show that the likelihood of confusion will actually cause him irreparable injury for which there is no adequate legal remedy.

To succeed in a trademark infringement claim, a party must first show that it has a protectable right in the mark and second, show that there is a likelihood of confusion. The non-exhaustive list of factors, or digits of confusion, includes: (1) the type of trademark allegedly infringed; (2) the similarity between the two marks; (3) the similarity of the products or services; (4) the identity of the retail outlets and purchasers; (5) the identity of the advertising media used; (6) the defendants’ intent; and (7) any evidence of actual confusion. Brennan’s, Inc. v. Bert Clark Brennan; Blake W. Brennan, 289 Fed. Appx. 706; .S. App. LEXIS 16890.

Cybersquatters – Buying and Selling Domain Names

Cybersquatting is the act of registering domain names, especially those connected with recognizable trademarks, with the intent to resell the domain name at an exaggerated price. Most cybersquatters take advantage of the domain registration companies’ first come/first serve by submitting a list of the most popular words and names all at once. A cybersquatter can literally sit on a domain name for years, paying their fees from the profits of individual domain name resales. The only remedy for the actual trademark owner is to sue the cybersquatter, relinquish the domain name or pay whatever price the current domain name owner demands.

Buying and selling domain names is perfectly legal, until the cybersquatter infringes on a third party’s trademark or begins using the name in “bad faith.” Most domain investors operate within legally-acceptable territory; however, in some cases the domain owner is not aware of the legal constraints, or chooses to ignore them.

Domain Name Disputes

Possession of a trademark for a given term does not automatically mean a legitimate claim exists to a domain name. Possession is only one of three requirements needed to win ownership of a domain name. One must also prove the domain registrant has no legitimate interests in the domain and that they evidenced bad faith in registering the domain name, according to the Uniform Dispute Resolution Policy of ICANN’s, the policy governing ownership of disputes for generic TRLDs (.com, .net, .org, .biz, and .info) and the U.S. Consumer Protection Act 15 U.S.C. §1125.

Under the UDRP, the following is accepted as a valid reason to file complaint.

1. domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;

2. you have no rights or legitimate interests in respect of the domain name; and

3. your domain name has been registered and is being used in bad faith.

Under the UDRP, the following shall be evidence of the registration and use of a name in bad faith:

1. circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or

2. you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or

3. you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

4. by using the domain name, you have intentionally attempted to attract, for commercial gain, internet users to your web site or other on-line locations, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of your web site or location.

Before making a complaint make sure you consult a qualified trademark attorney with experience in domain names.

The Nacol Law Firm PC
Law office of Mark Nacol
Serving clients in the Dallas / Fort Worth Metroplex area for over 30 years
Tel: 972-690-3333

Intellectual Property - "Trade Dress"

Trade dress is a form of intellectual property that refers to the visual appearance and/or characteristics of a product or its packaging that promotes the product and signifies the source of the product to consumers. Basically, it creates a visual impression which functions like a word trademark. Coca-cola‘s bottling, the overall look of a greeting card line, McDonald’s golden arches, and the overall design of an automobile and even the shapes of buildings have been protected as trade dress. Though trade dress is difficult to define, in recent years significant decisions made by the Supreme Court have assisted in molding the legal issues surrounding trade dress. Specifically, in Grey et al vs. Meijer, Inc., the Court stated the general rule regarding protection of trade dress, as follows:

“The Lanham Act’s protection of registered trademarks also extends to unregistered trade dress. To recover for trade dress infringement under § 43(a) of the Lanham Act, 15, U.S.C. §1125(a), a plaintiff must prove by a preponderance of the evidence:

1. that its trade dress has obtained “secondary meaning” in the marketplace;
2. that the trade dress of the two competing products is confusingly similar; and
3. that the appropriate features of the trade dress are primarily nonfunctional.”

The Court identified eight factors that a court might use to determine whether there is a likelihood of confusion in the trade dress of two competing products:

1. strength of the plaintiff’s mark;
2. relatedness of the goods;
3. similarity of the mark;
4. evidence of actual confusion;
5. marketing channels used;
6. likely degree of purchaser care;
7. defendant’s intent in selecting the mark; and
8. likelihood of expansion of the product lines.

The Court went on to state “the strength of a mark is a determination of the mark’s distinctiveness in the marketplace. A mark is strong if it is highly distinctive, i.e. if the public readily accepts it as the hall mark of a particular source; it can become so because it is unique, because it has been the subject of wide and intensive advertisement, or because of a combination of both. The stronger the mark, all else equal, the greater the likelihood of confusion…”

“Strength of a plaintiff’s trade dress depends upon the interplay of two elements: 1) the uniqueness of the trade dress and 2) the investment in imbuing a trade dress with secondary meaning.” Thus, the most mundane packaging may be infused with meaning by advertising and other promotional tools, rendering a strong trade dress.

Therefore, trade dress may be protectable under federal and state unfair competition laws if the proper requirements are met.

In Taco Cabana International, Inc. v. Two Pacos, Inc., the Court determined not only that restaurant décor may be protected as trade dress, but also that trade dress may be inherently distinctive and protectable from the moment of adoption.
In Wal-Mart Stores, Inc. v. Samara Brothers in a unanimous decision by Justice Scalia, the Supreme Court held that, “in an action for infringement of unregistered trade dress under §43(a) of the Lanham Act, a product’s design is distinctive, and therefore protectable, only upon a showing of secondary meaning.” In this decision, the Court made a distinction between product design and product packaging, requiring proof of secondary meaning only for protection of the former. The Court perceived that design, unlike packaging, did not normally perform the source-identifying function of a mark.

“…where it is not reasonable to assume consumer predisposition to take an affixed word or packaging as indication of source…inherent distinctiveness will not be found. The result of this decision is that litigants could challenge the application of the inherent distinctiveness rule to types of product packaging or word marks where it is not clear they perform a branding function.

In TrafFix Devices, Inc. v. Marketing Displays, Inc. the Court’s decision posed an important constitutional questions. Did the patent clause in Article 1, Section 8, Clause 8 of the Constitution, grant to Congress the power to grant to Authors and Inventors exclusive rights for “limited times,” operate as both a grant and a limitation? They reasoned that trade dress law and patent law serve different purposes, that it is common for different intellectual property interests to inhere in the same subject matter, that no constitutional grant is absolute, and that the policies of the Patent Act would not be unduly imposed because trade dress claimants must still meet significant proofs to assert trade dress rights. In this decision the Court describes trademark functionality as any design feature that performs a function (whether or not better than alternatives) or that has an effect on cost or quality. This decision is important because it states that any “effect on cost or quality” is enough to make a design functional in the trademark sense, regardless of whether it is important to competition that the design be available to others. It did not matter that others might have developed equally effective or superior designs. Because it was functional in a trademark sense, it was not eligible for trade dress protection.

It is evident that the Supreme Court’s jurisprudence has resulted in confusion surrounding trade dress and that further litigation will be necessary to make such issues more clear.

The Nacol Law Firm PC
Law office of Mark Nacol
Dallas / Fort Worth Metroplex area attorney
Serving clients for over 30 years
Tel: 972-690-3333