This article has been written by Kishita Gupta, an advocate who is a graduate of the Unitedworld School of Law, Karnavati University in Gandhinagar. In this article, the primary trademark legislation of the United States of America, which is the Lanham (Trademark) Act, 1946, has been discussed in detail. The author has also tried to cover various aspects related to the Act in this article, such as the ‘use in commerce’, ‘fair use’, ‘the likelihood of confusion’, etc.
It has been published by Rachit Garg.
Do you have any products that are exclusive, and do you want to protect their exclusivity? Then this article is the right place for you. In this article, we will be discussing the Lanham (Trademark) Act, 1946, which is the prime trademark legislation in the United States of America. The Lanham Act, formally known as the Trademark Act of 1946, provides for the registration and protection of trademarks and service marks in the United States. The Act has been amended several times since it was enacted on July 5, 1946.
The Lanham Act was established to provide a legal framework for the registration, maintenance, and protection of trademarks in the US. It states that a trademark is a distinctive mark, symbol, or device that is used to identify and distinguish the goods or services of one party from those of another. A common component of both infringement and unfair competition charges is the potential for consumer confusion. One of the purposes of the Lanham Act is to protect consumers from confusion as to the source of products and services.
The Lanham Act also provides remedies for trademark infringement, dilution, and unfair competition. It sets out the rules and regulations for registering trademarks as well as the procedure for canceling or invalidating an existing registration. It also outlines the requirements for the use of trademarks, including proper trademark usage, maintenance of a trademark, and enforcement of trademark rights.
Overview of the Lanham Act
The Lanham Act provides nationwide protection for trademarks and service marks that are used in interstate commerce. This means that a trademark that is registered with the US Patent and Trademark Office (USPTO) is protected throughout the US. The Act also provides for a system of registration and enforcement of trademarks, as well as the ability to obtain remedies for trademark infringement and dilution.
The Lanham Act is broken down into four subchapters. After the first three subchapters were approved in 1946, the fourth was added.
- The first two of these four subchapters deal with the rules governing trademark registration. The principal register is covered in the first, while the supplemental register is covered in the second. The steps involved in registering a trademark and the requirements to do so are among the subjects covered.
- The mark, for instance, needs to be special. The mark cannot be identical to an already-existing trademark, nor can it be so generic that it cannot be distinguished from other trademarks.
- The third chapter discusses trademark infringement and the potential legal remedies in such situations.
- The Madrid Protocol is covered in the fourth chapter, which deals with the international registration of marks.
The Lanham Act states that a trademark is a distinctive mark, symbol, or device that is used to identify and distinguish the goods or services of one party from those of another. The Act also provides for certain “evidentiary presumptions” that apply to trademark registrations. These presumptions include that a trademark is valid and has been used in commerce, that a trademark is owned by the registrant, and that a trademark is likely to remain distinctive.
The Lanham Act also provides for a warning function that discourages the use of trademarks by others without the authorization of the trademark owner. The Act states that any person who uses a trademark in commerce without the authorization of the trademark owner can be liable for damages. The Act also states that a trademark owner can seek relief in the form of injunctive relief, damages, and attorney’s fees.
Nationwide protection under the Lanham Act
Considering the fact that the Lanham Act is a federal law, it creates an impact all over the nation. Under the Lanham Act, a trademark that is registered with the USPTO is granted a number of rights. These include the exclusive right to use the trademark in connection with the goods or services for which it is registered, the right to seek relief for trademark infringement, the right to use the trademark in commerce, and the right to register the trademark in foreign countries.
In order to obtain nationwide protection under the Lanham Act, a trademark must be registered with the USPTO. This involves the submission of an application, which must include the name and address of the applicant, the name and description of the goods or services for which the trademark will be used, and a drawing of the trademark. The application must also include a “declaration of use in commerce,” which is a statement that the trademark is currently being used in commerce.
History of trademark law in the USA
Trademarks were not specifically discussed at the American Constitutional Convention, in contrast to patents and copyrights. But the idea of a trademark has been around for centuries, as evidenced by the discovery of marks on ancient pottery as well as the practice of guildsmen in the Middle Ages of adding distinctive marks to their products.
The common law rules protecting trademarks were imported from England’s common law into the American colonies and provided some state-level protection. Nine years after it was approved in 1870, the first federal trademark statute was declared invalid. Congress responded by passing a new trademark statute in 1881. The Lanham Act, which established the U.S. Patent and Trademark Office (USPTO), also established trademark registration procedures and specified the government protections provided to trademark owners, was passed by Congress in 1946 after that statute underwent a significant revision in 1905.
The Federal Trademark Dilution Act of 1995
Only 25 states had state anti-dilution laws in 1995, but since famous marks were typically used nationwide, Congress opted to enact a federal anti-dilution law. Only “famous” marks are protected under the Federal Trademark Dilution Act of 1995 (FTDA), which also offers criteria for determining whether a mark qualifies as “famous.” With the inclusion of Subsection (c) to Section 43 (15 U.S.C. § 1125) of the Act and the definition of dilution in Section 45 (15 U.S.C. § 1127) of the Act, the FTDA helped to broaden the Lanham Act. The amendment, according to the House of Representatives report, was created to shield well-known trademarks from later uses that would obscure or lessen their uniqueness, even in the absence of a probability of confusion.
If a trade name or mark is used commercially in commerce after it has gained notoriety and if this usage lessens the mark’s distinctiveness, the FTDA permits legal action. Instead of proving the possibility of dilution, the trademark owner must demonstrate actual dilution. The Patent and Trademark Office argued that famous marks needed protection regardless of whether the marks were registered in the nation where protection was sought, despite the fact that the bill’s original language required the mark to be registered in order to be protected.
The FTDA only offers monetary compensation to successful claimants and injunctive relief if the defendant knowingly seeks to trade on the reputation of the owner or dilute the well-known mark. Additionally, the FTDA stipulates defenses against dilution claims, such as non-commercial use of the name, news reporting and commentary, fair use through comparative advertising, and federal trademark registration.
The “non-commercial use” defense of Section 43 of the Lanham Act sometimes includes freedom of speech as a dilution defense, even though a parody exception is not officially mentioned in the list of defenses for dilution.
Significance of the term: use in commerce
Trademark law has an old saying that goes, “Use it or lose it.” Although using a mark can seem like an easy concept to grasp, ‘use’ is a difficult term to define. The “use in commerce” criteria for obtaining and maintaining a federal registration necessitate a genuine ‘sale’ or ‘transportation’ of a good bearing the mark, as well as follow-up activity on the part of the mark owner that demonstrates a consistent attempt to employ the mark in the ordinary course of business. However, not all actions taken in relation to a mark are appropriate ‘uses’.
The challenge trademark owners encounter while trying to fulfill the use requirement is not a recent one. The repeated and recurrent challenges that certain trademark owners encounter when they try to convince a court that the necessary use has been made are illustrated by two recent rulings.
The Trademark Trial and Appeal Board declined to identify a triable question of fact about whether sufficient use of the mark had been made in the 2013 decision, Clorox Company v. Hermilo Tamez Salazar, where the trademark owner had used the mark in pre-sale activities but had not yet sold a mark-bearing product. In Clorox, a 2013 precedent-setting Board decision, the applicant sought to register the term “Clorotec” and an associated design for specific electronic equipment connected to the production of various cleaning solutions. The opposer filed a motion for summary judgment, arguing that the Clorotec mark had not been used in a manner that was significant. After siding with the opposer and ruling that the applicant had not used its mark in commerce at the time of filing, the Board eventually decided against registering the mark.
Similar to this, despite the owner providing four verified sales of its trademarked goods, a court refused to determine that there were triable questions of fact sufficient to withstand a summary judgment request in the 2011 decision Gameologist Group, LLC v. Sci. Games Int’l, Inc. The rulings serve as a reminder of how vulnerable some trademarks are to the current use criterion, which appears universal on the surface but is applied unevenly.
The owner must “use” their brand “in commerce” in order to achieve registration under federal trademark law. Instead of the inventiveness or invention that may have preceded the formation of the trademark, the basis for rights under the federal trademark registration scheme is making enough public use of the mark in the marketplace. So it stands to reason that one need for acquiring and maintaining Lanham Act-protectable rights in a trademark is its use in commerce. If a trademark has not been used properly when a federal registration is granted, the registration is worthless from the start.
A single sale of eight pieces of luggage for $760 over the course of two years was deemed de minimis and insufficient to establish usage as a mark in Momentum Luggage Leisure Bags v. Jansport, Inc. (2001). The cases listed below show that attempts to prove the ‘use’ are beset with what seem to be insurmountable challenges since the purported use was deemed insufficient because it was minor, de minimis, or too intermittent. In the case of Paramount Pictures Corp. v. White (1994), it was determined that adding a mark to a game made up of three pieces of paper and dispersing it to advertise a musical group qualified as de minimis use. In WarnerVision Entm’t Inc. v. Empire of Carolina Inc. (1996), despite the fact that one of the plaintiff’s promotional efforts led to a sale to a significant retailer, the plaintiff’s efforts to demonstrate substantial use were unsuccessful since just a few presentations were made to industry buyers.
Filling of a trademark under the Lanham Act
The Lanham Act’s conditions must be met by a trademark applicant’s application in order to get a federally registered trademark. These conditions are mentioned in Section 1 (15 U.S.C. § 1051) of the Code.
- To be eligible for protection, a mark must first be used or intended for use in commerce. A mark is used in commerce when it is applied in any way to goods, their containers display that goes with them, tags, or labels that are attached to them, and when those goods are sold or transported commercially. As per Section 45 (15 U.S.C. § 1127), a mark is also used in commerce when it is applied in any way to services, such as when it is used or displayed in the sale or advertising of services and those services are provided commercially.
- The second requirement is to adhere to Section 2 (15 U.S.C. § 1052) of the Lanham Act, which specifies the kinds of marks that can be registered. Among other requirements, Section 2(d) states that a mark is not registerable on the principal register if it consists of or contains a mark that is so similar to one that has been registered with the Patent and Trademark Office, or one that has been used in the United States by another party before and has not been abandoned, that it is likely to cause confusion when used on or in connection with the applicant’s goods. This clause is also known as the “likelihood of confusion.”
Likelihood of confusion
Under Section 43(a)(1)(A) (15 U.S.C. § 1125(a)(1)(A)), a mark owner may file a lawsuit if there is a risk that her unregistered mark would be confused with another supposedly similar mark. For registered or unregistered marks, respectively, a mark owner may file a lawsuit for a probability of misunderstanding with her mark and an allegedly confusing mark under Sections 32(1) (15 U.S.C. § 1114) or 43(a)(1)(A).
A trademark owner who successfully registered her mark and complied with all registration criteria is entitled to file a lawsuit under Section 32(1) for the possibility of confusion. In a Section 32 cause of action, the existence of a registered mark creates a presumption of validity for the mark. However, if a mark owner fails to submit an application or if the application is rejected during the trademark examination process described above, the mark owner only retains her common law rights in the mark if the applicant does not meet the statutory requirements of Section 2 and is unable to successfully register her mark.
A cause of action under Section 43(a)(1)(A) must be brought by the mark owner on the grounds of a possibility of confusion based on common law rights. Therefore, when an applicant or other unregistered mark owner wants to exercise her common law rights over another mark, a lawsuit may be brought under Section 43(a)(1)(A). No assumption of a mark’s validity exists in this situation.
The degree of distinctiveness of a trademark, which can be arbitrary, fanciful, suggestive, descriptive, or generic, determines its level of protection. Arbitrary marks are generally thought to be the most distinctive, whereas generic marks are thought to be the least distinctive. In the case of Abercrombie & Fitch Co. v. Hunting World, Inc. (1976), the principle of levels of distinctiveness of a trademark was outlined. It was stated that, arranged in an ascending order roughly reflecting their eligibility for trademark status and the degree of protection accorded, the categories of terms are generic, descriptive, suggestive, and arbitrary or fanciful, but the lines of demarcation are not always bright.
The infamous Polaroid factors
Several criteria derived from a 1961 decision, Polaroid Corp. v. Polarad Electronics. Corp., are used by courts to determine the likelihood of confusion. These elements, also referred to as the Polaroid factors, may differ slightly depending on which federal court is using them. Not all of the variables may be especially helpful in any specific scenario; they are only meant to be a guide.
In the case of Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co. (1888), the Goodyear Rubber Company sued Goodyear’s India Rubber Glove Manufacturing Company in that lawsuit to prevent them from using the name “Goodyear’s Rubber Manufacturing Company.” The court ruled that the term “Goodyear Rubber Company” is not one that can be appropriated exclusively. “Goodyear Rubber” is a name used to describe a class of well-known products created via the method known as Goodyear’s Invention. Therefore, no one may claim exclusive ownership of names that describe a class of things. The word “Company” is simply included to denote the formation of an alliance or partnership by the parties to trade in such items, whether to produce or sell them.
Strength of the mark
A mark is considered ‘weak’ if it is only descriptive and has not developed enough auxiliary meaning. A mark is considered ‘strong’ if it has taken on additional significance or if it is arbitrary, fantastical, or provocative. It will be challenging for the owner of a weak mark to demonstrate a likelihood of confusion. For instance, it was decided that the cleaning service logo “Maid in America” is descriptive. The owner was unable to provide enough evidence from sales or advertising to support secondary meaning. As a result, the trademark owner’s allegation of infringement against a mark that was identical was unsuccessful. A survey can be used to demonstrate secondary meaning in infringement cases when descriptiveness is a point of contention.
Similarity of the marks
Generally speaking, all aspects of a brand, including its appearance, sound, connotation, and commercial impression, must be compared. However, analyzing and contrasting each mark’s components may be necessary to determine whether the two marks are similar.
One instance involved a lawsuit between the owners of the trademarks “The Travel Planner” and “OAG Travel Planner.” The use of OAG in conjunction with “Travel Planner” produced an arbitrary mark, the court said, even though “Travel Planner” itself was weak and descriptive. The Court found that the marks were likely to cause consumer confusion because of their visual and aural similarity. In a similar vein, a Court determined that Little Dutchman and Dutch Masters cigars were identical due to the widespread use of the dominant term “Dutch.”
However, a claim of mark resemblance may still be made notwithstanding the addition of a prefix or suffix, letter changes, or clarifying information. For instance, it was discovered that the following marks were similar: Platinum Puff and Platinum Plus, Zirco and Cozirc, Magnavox and Multivox, Simoniz and Permanize, Maternally Yours and Your Maternity Shop.
The similarity in meaning between the marks may also be taken into account. For instance, it was determined that the marks Mr. Clean, Mr. Rust, and Mr. Stain, Thirty Forty Five and 60 40 20, and Pledge and Promise were comparable.
Similarity of the goods
The test for infringement is whether a typical, cautious buyer would be likely to buy one thing while thinking he was buying the other. For instance, when used on bleach, Chlorit can be mistaken for Clorox. In general, if a trademark owner uses a similar mark for wholly unrelated goods, it is acceptable. For instance, it was established that using the Lexus brand on automobiles would not cause confusion among users of the Lexis database services.
A trademark owner may receive protection for products that are connected to theirs. A trademark for canned salmon, for instance, might cover other canned fish as well. It’s possible to use a mark on electric lamps in addition to kerosene lamps. In these situations, the courts take into account whether consumers might reasonably anticipate that the products came from the same source. Customers are more inclined to anticipate an increase in the product base the more widely used and well-known the mark is.
For instance, would customers confuse the McSleep trademark from Quality Inn for hotel services with the McDonald’s trademark for restaurants? Yes, a federal district court has ruled. The “Mc” prefix has been utilized by the McDonald’s Corporation so frequently that its growth into non-food areas is anticipated. The business has actually already entered the children’s clothing market with its McKids clothing line. The Coca-Cola trademark, which has been licensed for use on apparel, glassware, puzzles, watches, bags, and other non-food items, is the same. Unusual goods have also violated the Coca-Cola brand. (The trademark, for instance, has been applied to “can wraps,” which are labels designed to be placed around an alcoholic beverage to hide its contents.)
The courts also take the similarity of the distribution and advertising methods into account. Many courts consider each piece of evidence separately to decide whether consumers or distributors might be vulnerable to misinterpretation. A salami dispute might be avoided, for instance, if the plaintiff sells salami directly to customers while the defendant exclusively provides delicatessens with salami in bulk.
Degree of care exercised by the consumer
Depending on the purchase, the consumer’s level of concern changes. A buyer who spends a lot of money on a product is typically more selective and less likely to be readily misled by identical marks. The consumer purchases pricey products less frequently, which accounts for a higher level of care. The courts reason that these buyers will probably be more selective and source-conscious when making purchases of real estate services, insurance, or other “high ticket” goods. In these situations, the courts want a stronger demonstration of likeness to support a likelihood of confusion argument. The same is valid for products bought by “professional buyers.” A professional buyer is someone who comes to the point of purchase with expertise in the products (such as a pharmacist, doctor, architect, constructor, etc.). A knowledgeable buyer is less likely to be perplexed because they are more knowledgeable about making good purchases.
The most likely person to be confused by similar marks is a regular consumer, especially one who makes impulsive, low-cost purchases. For instance, this customer might swiftly scan an aisle at a grocery store and impulsively buy a box of trash bags without understanding that she was perplexed by the assortment of brands. A lower standard of care has been used in this case.
Although demonstrating infringement does not depend on the defendant’s intent, it is an important consideration. The Restatement of Trademarks states that it is fair to take the defendant’s intent into account because a party who intentionally seeks to create confusion would typically succeed in doing so. In most cases, the plaintiff must rely on circumstantial evidence, such as how the defendant’s mark was selected or whether the defendant continued to use the mark notwithstanding the plaintiff’s warning, to establish the defendant’s intent to deceive.
It is not necessary to show that there was actual confusion when assessing trademark infringement. However, in a case of infringement, such proof might be convincing. Companies occasionally undertake polls to ascertain the level of actual uncertainty. These surveys are pricey, and if carried out incorrectly, they could undermine the plaintiff’s case.
Review of trademark applications under the Lanham Act by the USPTO
If an applicant complies with Section 2(d), the USPTO, and specifically a trademark examining attorney (examiner), makes the decision. The USPTO evaluates whether there is a possibility of confusion between the applicant’s mark and an already registered or pending mark in accordance with Section 2(d) of the Lanham Act. The goods or services employing the marks must be sufficiently related to one another for consumers to be likely to be perplexed as to the source of the goods or services.
Marks do not have to be identical to create the possibility of confusion, as per USPTO Section 1207.01 of the Trademark Manual of Examining Procedure (TMEP). The question is whether there is a likelihood of confusion regarding the source or sponsorship of the goods or services due to the marks used therein, rather than whether the particular marks themselves or the goods or services offered under the marks are likely to cause confusion. “Similar in sound, appearance, or meaning,” goods or services “may be sufficient to support a finding of the likelihood of confusion.” Additionally, if two marks “convey a similar general meaning and produce the same mental reaction” in consumers or “create the same overall commercial impression,” an examiner may conclude that there is a likelihood of confusion.
Only when goods or services are “related in such a way that consumers are likely to assume (erroneously) that they come from a common source” can two similar marks result in the possibility of confusion. For instance, because they are frequently offered in the same places, food and beverage items are closely related products. Therefore, a consumer might incorrectly believe that a food item and a beverage item with the same mark are coming from the same source, which would lead to uncertainty over the source. In contrast, the term ‘United’ designates both a provider of healthcare services and an airline.
The markets for healthcare and air travel, however, are so unrelated that customers would not be misled into believing that “United Airlines” also offers healthcare or the opposite. The application will be rejected on the basis of the possibility of confusion if the examiner determines that there is a likelihood of confusion between the applicant’s mark and another mark under Section 2(d). An office action is used to convey this denial. The applicant must respond to the office’s action by making changes to their applications or presenting justifications for other changes and/or non-alterations. The back and forth between responses and office actions throughout this communication process between the examiner and applicant can last for years.
The examiner may reject the application with a final office action if the applicant is unable to satisfy all of the examiner’s objections. The applicant may only appeal this final denial to the Trademark Trial and Appeal Board (TTAB) and only with regard to matters containing subject matter covered by Sections 2, 3, 4, 5, 6, or 23 of TMEP.
The mark will instead be published in the Official Gazette (OG) and Trademark Official Gazette (TMOG) after the examiner authorizes it, assuming there are no objections or the applicant successfully overrides all objections. A person who opposes the registration of the mark after publication has 30 days to file their opposition to registration. The TTAB conducts a proceeding following the filing of an opposition.
Anti-Disparagement Clause of the Lanham Act
The Lanham Act’s Anti-Disparagement Clause, included in 15 U.S. Code 1052(a), forbids the trademarking of entities. According to the clause, no one is allowed to trademark anything that contains immoral, dishonest, or scandalous material, as well as material that may disparage or falsely imply affiliation with living or deceased people, institutions, beliefs, or national symbols, or bring them into disrepute.
In Matal v. Tam (2017), this clause was contested. In this case, the Supreme Court unanimously determined that the freedom of speech under the First Amendment is violated by the Anti-Disparagement Clause. The clause, according to the Court, amounted to unlawful viewpoint discrimination. This decision allows for the trademarking of some items that were previously barred due to their violation of the Anti-Disparagement Clause.
How is the First Amendment significant to the Lanham Act
The Lanham Act establishes civil responsibility for unlawful uses of legitimate marks and trade dress that are likely to lead to consumer confusion in order to protect trademarks and trade dress. However, the First Amendment’s safeguards for free speech do not apply to speech covered under the Act.
The Supreme Court acknowledged that the First Amendment protects commercial speech in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc. (1976). According to the Supreme Court, until this 1976 ruling, the First Amendment did not cover commercial speech. Since the Virginia State Board of Pharmacy ruling, defendants have successfully argued for the First Amendment’s protection against the illegal use of trademarks in parodies that don’t mislead consumers.
The scope of First Amendment protection afforded to persons who utilize another’s trademark depends on the sort of speech. The Supreme Court established First Amendment protection for commercial speech in the Virginia State Board of Pharmacy ruling; the Court later limited this defense in Central Hudson Gas & Electric Corp. v. Public Service Commission of New York (1980). The Court restricted this First Amendment protection so that it does not apply to commercial speech that refers to illegal or deceptive activities.
In order to prevent the general public from reacting ‘irrationally’ to the facts, states can even outlaw factual, non-misleading commercial communication. Sometimes it is difficult to tell what language is being used. For instance, when fully protected speech and commercial speech are “inextricably intertwined,” the Supreme Court views the combined form as fully protected speech that is not intended for commercial gain. Courts may disagree when defining speech as commercial or noncommercial since advertising has both social and financial significance.
Defendants have successfully used the First Amendment’s protection in trademark infringement and dilution lawsuits by claiming that the plaintiff’s trademark was being used to make a significant social or commercial point to the public. The use of another person’s trademark in a parody frequently falls under the constitutional protection provided for non-commercial speech and is therefore only occasionally liable.
A First Amendment argument is typically dismissed if the defendant utilizes another’s trademark in a business setting. For instance, the defendant in Mutual of Omaha Insurance Co. v. Novak (1986) promoted goods with the label “Mutant of Omaha” to send a message of protest against nuclear weapons. The Court rejected the defendant’s First Amendment defense since there were other non-commercial ways to convey the message without using the plaintiff’s brand.
The U.S. Supreme Court ruled on June 24, 2019, in Iancu v. Brunetti (2019), that Section 2(a) of the Lanham Act, which forbids trademark registration of those “consisting of or comprising immoral or scandalous matter,” violates the First Amendment.
This judgment is consistent with the Court’s 2017 ruling in Matal v. Tam (2017), which held that the First Amendment is violated by the ban on the registration of ‘disparaging’ marks.
The disparagement clause violates the First Amendment in Tam, according to all eight Justices; the newly confirmed Justice Neil Gorsuch did not take part in the decision because it targets derogatory expression with the intention of discouraging its use while allowing registration of words and other marks that are positive or benign. Laws that discriminate against people or groups based on their opinions or beliefs cannot pass muster with the First Amendment unless they restrict government expression, because trademark registrations are “private, not government, speech.” The disparagement clause was an unlawful regulation of expression since it did not pass constitutional muster.
Tam‘s judgment opened the door for First Amendment challenges to other trademark law issues. For instance, the Lanham Act’s ban on the registration of scandalous or immoral brands is likely to pass constitutional scrutiny. Tam makes it explicit that trademark regulations need to pass muster with the First Amendment not just when they forbid or punish expression but also when they discourage the use of a protected expression, including commercial expression. Currently, trademark laws permit the registration of things like descriptive terms, well-known slogans, colors, product features, and other “nontraditional marks” that had intrinsic value in the market before they were used as trademarks. These things should arguably stay in the public domain for everyone to use. These laws may discourage the use of this phrase, and Tam may not have provided a strong enough constitutional basis for granting these kinds of exclusive trademark rights.
Evidentiary presumptions under the Lanham Act
The Lanham Act provides for certain “evidentiary presumptions” that apply to trademark registrations. The evidentiary presumptions under the Lanham Act provide trademark owners with strong legal protection.
For example, a trademark owner can rely on the ‘presumption of validity’ to prove that the trademark is valid and has been used in commerce. Additionally, the ‘presumption of ownership’ allows the trademark owner to prove that they own the trademark. Finally, the ‘presumption of continued distinctiveness’ can be used to prove that the trademark is likely to remain distinctive.
The evidentiary presumptions under the Lanham Act are important because they provide trademark owners with legal protection against trademark infringement and dilution. By relying on these presumptions, a trademark owner can prove their rights to the trademark and seek relief in the form of injunctive relief, damages, and attorney’s fees.
Presumption of validity and ownership
The validity of every issued U.S. trademark is assumed. However, because the USPTO is an administrative agency (i.e., a division of the executive department of government), the courts have the authority to review its rulings.
A person attempting to register their trademark does not need to provide evidence in court that the trademark is legitimate due to the presumption of validity and ownership. It is the responsibility of the alleged infringer to demonstrate through clear and compelling evidence that the USPTO erred in awarding the trademark registration.
Similar to the presumption that USPTO rulings have in the area of patents, the likelihood-of-confusion determination made by the USPTO should be given the benefit of the doubt. The USPTO is perfectly capable of making qualified determinations regarding a probability of confusion with the evidence in front of them, as evidenced by the trademark examiners continually exceeding quality requirements. The USPTO would be in line with other agencies in terms of the respect and deference accorded to administrative decisions if such a presumption were allowed.
Additionally, courts assume the legitimacy of patent rulings rendered by the USPTO, the same government body that issued the contested marks. The vigorous trademark prosecution mechanism used by the USPTO should be treated with the same respect and deference as in patent law. As a result, there would be a distinct distinction between judicial law and administrative law, and there would be less conflict between the two. The presumption of validity prevents disputes between the court and agency and respects the USPTO’s vast skill and understanding of a likelihood-of-confusion analysis.
It was noted in the cases of Maktab Tarighe Oveyssi Shah Maghsoudi v. Kianfar (1999) and Vuitton et Fils S.A. v. J. Young Enterprises, Inc. (1981) that the impact of a disputable registration is to transfer the burden of proof of ownership and validity from the plaintiff to the defendant. By a preponderance of the evidence, the defendant must refute the plaintiff’s presumed exclusive right to use the trademark.
Presumption of continued distinctiveness
Some trademarks are already distinctive by nature, while others are not. Generally, marks that are arbitrary (the meaning of the mark has no relation to goods/services), whimsical (a made-up word), or suggestive (the meaning of the mark suggests a trait of goods/services) are considered to be inherently unique marks. There will be barriers to the registration of marks that are descriptive of the products, such as an office action that denies registration on the Principal Register.
The option for registration on the Supplemental Register may be proposed in specific circumstances where the applied-for mark is not as descriptive, at least in the opinion of the USPTO trademark examining attorney. These descriptive marks need to have developed distinctiveness in order to be registered on the Principal Register.
To ‘acquire’ is to earn. Consequently, a brand that has developed distinctiveness has benefited – it is now more recognizable. This increase in distinctiveness normally takes time, usually over a number of years. Since a descriptive mark would not become recognizable overnight, transformation is a process that takes time and effort. “Acquired distinctiveness” is also referred to as “secondary meaning,” and it denotes that the mark has come to have an importance among consumers that is distinct from its dictionary definition.
If a mark is not already distinctive, it must demonstrate its distinctiveness in relation to the products or services of the trademark holder. Section 2(f) [15 USC 1052(f)] evidence is another name for this. According to 37 CFR 2.41, there are three basic categories of evidence that may be utilized to support a Section 2(f) claim:
- Prior Principal Register registrations of the same mark for sufficiently related goods or services;
- Actual proof demonstrating the length, scope, and type of use of a mark; and
- Five years of essentially exclusive and continuous use (also known as the Section 2(f) claim).
The particulars of each individual mark will determine the level of distinctiveness that is deemed sufficient for registration on the Principal Register. More evidence will be needed for highly descriptive marks than for less descriptive ones. If someone wants to register their mark on the Principal Register but it is already registered on the supplemental register, a fresh application must be submitted. Incorporating Section 2(f) evidence earlier in Principal Register application would be more effective. Careful thought should be given to the pieces of actual evidence that might help show a sufficient level of distinctiveness if the applicant lacks any earlier registrations or at least five years of usage.
Warning function of the Lanham Act
The Lanham Act also provides for a warning function that discourages the use of trademarks by others without the authorization of the trademark owner. The Act states that any person who uses a trademark in commerce without the authorization of the trademark owner can be liable for damages. Additionally, the Act states that a trademark owner can seek relief in the form of injunctive relief, damages, and attorney’s fees.
The warning function of the Lanham Act is an important tool for protecting trademarks from infringement. By requiring that any person who uses a trademark without authorization be liable for damages, the Act provides a strong incentive for people to respect the rights of the trademark owner. The warning function also serves to deter future infringement by making it clear that any person who uses a trademark without authorization will be held liable for damages.
Fair use exception
Intellectual property professionals are familiar with the fair use doctrine under copyright law. A similar idea can be found in trademark law, where it is acceptable to use another person’s mark in a ‘fair’ manner. Similar to copyright law, the usage is found to be “fair use,” where the perceived public benefit outweighs any purported harm to the trademark owner.
The Lanham Act’s Section 33(b)(4), 15 U.S.C. 1115(b)(4), contains a statutory fair use provision. Due to the statutory provision’s limited application, three additional, judicially created categories have emerged where using someone else’s trademark may not be judged to be infringing.
One of the few defenses a defendant has against a charge of infringing an unassailable registration is this “fair use” defense, which is specifically listed. It is frequently used as a defense against any claim of trademark infringement, including a claim based on non-incontestable registrations and a claim based on a violation of Section 43(a). Alleged common law infringements have also been subject to the elements of the statutory fair use defense.
A trademark owner is generally prohibited from monopolizing or appropriating a descriptive word or phrase owing to the statutory fair use argument. The court observed that the defense is only available in cases involving descriptive terms and only when the term is used in its descriptive sense rather than its trademark use in Zatarains, Inc. v. Oak Grove Smokehouse, Inc. (1983), a landmark case on the subject.
There was a division in the Courts of Appeals up until recently between those who held that a possibility of confusion precluded the statutory fair use argument and those who held that it did not. The U.S. Supreme Court ruled in KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc. (2004), that a finding of likelihood of confusion does not necessarily preclude the use of the statutory fair use defense and that it is the plaintiff’s responsibility to establish such a likelihood of confusion rather than the defendant’s burden of proof when asserting the fair use defense.
Nominative fair use refers to the use of the plaintiff’s mark in a descriptive manner to identify or describe the plaintiff’s goods or services, in contrast to most statutory fair use cases. WCVB-TV v. Boston Athletic Association (1991), although decided before the Ninth Circuit articulated the defense and created the phrase, is more logically a nominative fair use case. In this instance, a television station used the registered brand “BOSTON MARATHON” in connection with its broadcast of the running competition. The words “Boston Marathon” were shown on the screen by WCVB-TV before, during, and after they covered the actual race. Given that the trademark was largely utilized for descriptive purposes, the First Circuit determined that the fair use defense had been adequately raised. There was little chance of misinterpretation because of the “timing, meaning, context, intent, and surrounding circumstances.” Without permitting anyone to use the word “Boston Marathon,” the Court reasoned, it would be nearly impossible to describe the Boston Marathon.
In several of the nominative fair use instances ruled during the previous thirteen years, the facts were simple; the defendant used the plaintiff’s mark to refer solely to the plaintiff in these situations. In other instances, however, the defendant makes use of the plaintiff’s mark to designate a feature of its own products or services in addition to the plaintiff’s goods or services.
Playboy Enterprises, Inc. v. Terri Welles, Inc. (9th Cir. 2002), which involved a resume of sorts, is the most well-known of the “dual reference” nominative fair use cases. The proprietors of several Playboy trademarks sued Welles, a previous Playboy Playmate of the Year, on the grounds that her website and meta tags violated several Playboy trademarks. The district court determined that both nominal and statutory fair usage safeguarded:
- The title of the link page and the defendant’s website both utilize the phrase “Terri Welles – Playmate of the Year 1981”;
- using the repeated watermark “PMOY ’81”—an abbreviation for “Playmate of the Year”—on websites,
- utilizing the terms “playboy” and “playmate” in meta tags; and
- The defendant’s use of the terms PLAYBOY and PLAYMATE in banner advertisements on her website and other websites.
The Ninth Circuit’s decision expanded the nominative fair use argument to cases where the defendant utilized the plaintiff’s mark to refer to both the defendant and her qualifications as well as the plaintiff’s goods. The Court determined that Ms. Welles’ use of the terms “PLAYBOY PLAYMATE of the Year 1981,” “PLAYMATE of the Year 1981,” and “PMOY ’81” constituted a nominative fair use and served to identify herself.
Even though the defendant’s use of the in dispute phrases amounted to a “repetitious commercial theme,” the Court determined this use to be reasonable. The Court stated that the prominence of a descriptive phrase on a label, packaging, or advertisement does not necessarily show that the term is being used in a trademark sense. Nevertheless, the use of a challenged term as an “attention-getting symbol” can be used to demonstrate infringing usage.
Damages under the Lanham Act
The Lanham Act provides for a number of remedies for trademark infringement and dilution. These remedies include damages, injunctive relief, and attorney’s fees. Damages can be awarded in the form of actual damages, profits, or statutory damages. Actual damages are the actual monetary losses that the trademark owner has suffered as a result of the infringement. Profits are the profits that the infringer has earned as a result of the infringement. Statutory damages are a fixed amount of damages that can be awarded in lieu of actual damages or profits.
In order to obtain damages under the Lanham Act, a trademark owner must be able to prove that the infringement was willful and that the trademark owner has suffered some monetary loss. The amount of damages that can be awarded depends on the facts of the case, including the amount of monetary loss suffered by the trademark owner and the willfulness of the infringer.
Remedies for trademark infringement under the Lanham Act
Injunctive, affirmative, and monetary relief are the three main remedies for trademark infringement under the Lanham Act, and they offer both short-term and long-term solutions to stop the infringement and offer an equitable remedy.
Injunctive relief under the Lanham Act
The status quo in trademark infringement cases can be maintained by directing the immediate cessation of any further infringing conduct by the defendant, which is a power granted to federal courts for both preliminary and permanent injunctions. When monetary relief is insufficient or damages may not be calculable until the case moves forward, injunctive relief is the most frequently requested remedy in trademark infringement proceedings.
While the criteria used by federal courts to decide whether to award a preliminary injunction may vary slightly, generally speaking, a plaintiff who files a motion for a preliminary injunction must demonstrate:
- A chance of winning on the merits;
- A chance that the plaintiff would suffer irreparable harm without injunctive relief;
- A balance of hardship favoring the plaintiff; and
- Issuing an injunction is best for the general public.
A plaintiff seeking a preliminary injunction must file their application promptly since even a few days’ worth of delay could lead to the rebuttal presumption that the plaintiff is not experiencing irreparable harm.
Federal courts may order a defendant to take affirmative steps in addition to an injunction to stop any ongoing infringement in the market, such as ordering product recalls, corrective advertising campaigns, disclaimers, and the destruction of any infringing items.
The most frequent form of affirmative relief is forfeiture and destruction of the infringing articles under 15 U.S.C. 1118, which may include labels, signs, prints, packaging, advertisements, and wrappers bearing the registered mark or any copy, imitation, or counterfeit, including any molds, plates, or equipment used to produce the infringing good or render the infringing service.
The Lanham Act gives federal courts the option to award monetary damages for trademark infringement under 15 U.S.C. 1117(a), in addition to injunctive and affirmative remedies. The amount of a monetary award is, however, subject to considerable latitude by federal courts, and monetary relief is not always granted.
A successful party may get the following compensation if the court determines that monetary damages are appropriate in the circumstances where injunctive relief is sufficient to satisfy the case’s equities, such as attorneys’ fees and costs (only in unusual situations), the defendant’s financial gain, the plaintiff’s financial losses brought on by the defendant’s violation, as well as prejudgment interest.
Federal courts must balance the need to compensate the plaintiff with the need to prevent the defendant from obtaining unjust enrichment and future deterrence. Plaintiffs frequently ask for an award of the defendant’s profits, arguing that a sale gained by the infringing defendant is equivalent to a sale lost by the plaintiff. According to the Lanham Act, a plaintiff simply needs to show evidence of the defendant’s illegal sales in order to establish damages; nevertheless, several federal courts are still divided about whether sales may be omitted from consideration or whether the defendant’s sales can be directly attributed to the plaintiff.
Additionally, a plaintiff may establish damages by demonstrating actual losses (as opposed to just hypothetical losses) brought on by the defendant’s infringement. Calculating actual damages necessitates a fair and reasonable evaluation. When determining an equitable judgment, federal courts will take into account elements including lost revenues, royalties, goodwill, and rebranding.
Damages in cases of counterfeit cases
Producing and selling things that are intended to be identical or nearly identical to the original products constitutes trademark infringement. In addition to costing American businesses billions of dollars, these “knock offs” pose a severe risk to public health and safety since they unlawfully import goods, including fake food, medicines, and safety equipment. The counterfeit mark must be used on products or with services that are meant to appear roughly comparable to those for which the mark is registered in order for the Lanham Act to be applicable.
The Lanham Act was amended in 1984, granting trademark owners increased damages and adopting a considerably more severe stance in cases involving trademark infringement. Under 15 U.S.C. 1117(c), a plaintiff in a trademark counterfeiting lawsuit may choose between actual damages and statutory damages, providing a bigger possible recovery than in other Lanham Act cases. When proving actual damages and profits is extremely hard, as it commonly is with counterfeit companies that frequently do not retain accurate sales records, a plaintiff would typically choose statutory damages.
When determining damages under subsection (a) for any infringement of Section 1114(1)(a) of this title or Section 220506 of Title 36 involving the use of a counterfeit mark or designation, the court must enter judgment for a total of three times the profits or damages, whichever is greater, as well as a reasonable attorney’s fee, unless the court finds exceptions to this rule.
If statutory damages are chosen, the judge may award between $1,000 and $200,000 for each kind of commodity or service that was sold, disseminated, or made available for purchase. The court may award up to $2 million in damages if the plaintiff can further demonstrate willfulness.
The court may award treble damages (three times the estimated losses), in addition to attorney’s fees and prejudgment interest, when the plaintiff chooses actual damages and can prove willful counterfeiting of the mark. Since the defendants are normally held jointly and severally accountable for the single statutory sum, a plaintiff ordinarily cannot win numerous statutory damages awards in circumstances involving many defendants.
Recovery of the attorney fees
The law that addresses compensation for trademark infringement is 15 U.S. Code 1117. The provision that deals with the recovery of attorney fees is 15 U.S. Code 1117(a). According to the law, the court may grant the party who prevails in a matter reasonable legal fees.
The definition of an “exceptional case” was clarified by the Supreme Court in Octane Fitness, LLC v. ICON Health & Fitness, Inc. (2014). An “exceptional case” is one that stands out for either one of two reasons, according to the Court.
- The first is the viability of a party’s legal contention; in evaluating this aspect, judges should consider the relevant facts of the case and the applicable legal standards.
- Second, the unfair way the case was handled during the legal process Lower courts should evaluate each case individually and consider the totality of the circumstances to determine whether it qualifies as “exceptional.”
In the Octane case, the Patent Act, 35 U.S. Code Chapter 29, Section 285, was expressly addressed. However, the language used by the Patent Act and the Lanham Act to determine whether it is appropriate to give a successful party in a patent or trademark infringement action attorney fees is the same: “The court may award reasonable attorney fees to the prevailing party in exceptional cases.” In addition, lower courts have applied the ‘Octane test’ in cases involving trademark infringement.
The court acknowledged the same language as a sufficient justification to consider the Octane rule, even in a trademark infringement case, in Georgia-Pacific Consumer Products v. Von Drehle, (2015): “To be sure, the Octane Fitness Court did not interpret the attorneys’ fees provision of 1117(a). However, because the text of Sections 1117(a) and 285 is identical, we come to the conclusion that there is no justification for not using the Octane Fitness criterion when determining whether to provide attorneys’ fees under Section 1117(a)”. The Court went on to say that a district court may, in some circumstances, deem a case to be ‘exceptional,’ in which case it may grant attorneys’ fees to the party that prevails under Section 1117(a). First off, the viewpoints offered by the sides differ unusually in their merits, with the non-prevailing party’s position being either frivolous or objectively irrational. Second, the non-prevailing party litigated the matter in an unreasonable manner, or there is another reason to advance compensation and deterrent considerations in a given situation.
Significant amendments to the Lanham Act
Since its enactment in 1946, the Lanham Act has been amended several times. Some of the significant amendments include the Trademark Clarification Act of 1984, the Trademark Counterfeiting Act of 1984, the Trademark Revision Act of 1988, the Trademark Amendments Act of 1999, the Madrid Protocol Implementation Act of 2002, the Singapore Treaty, and the Anti-Counterfeiting Trade Agreement of 2011.
- The Trademark Clarification Act of 1984 amended the Lanham Act to require that all trademark registrations include a declaration of use in commerce. The Act also provided for the cancellation of registrations that are not used in commerce. It also provides for enhanced criminal and civil penalties for trademark counterfeiting. It shifts the standard for determining whether a mark has become generic from buyer motivation to the mark’s primary significance to the relevant public. The Act prohibits evaluating whether a mark has been abandoned using the motivation of the customer.
In order to overturn the ruling in Anti-Monopoly, Inc. v. General Mills Fun Group, Inc., (1979), Congress passed the Act. The Court had ruled that the primary factor in evaluating whether a trademark was generic was the buyer’s intent while making their purchase. Congress overturned the ruling and reinstated the standard criteria for trademark law. Genericity is established by the term’s principal meaning to the buying public, not by the motivation of the buyer.
- The Trademark Revision Act of 1988 amended the Lanham Act to provide for the registration of collective trademarks and service marks. The Act also provided for the registration of certification marks, which are marks that indicate that goods or services meet certain standards. The Trademark Revision Act of 1988 was passed with the goals of modernizing trademark law to reflect contemporary business practices, enhancing the value of the federal trademark registration system for American businesses, eliminating the current preference for foreign companies seeking to register trademarks in the United States, and enhancing the law’s ability to protect the general public from forgery, confusion, and deception.
- Further, the Trademark Amendments Act of 1999 amended the Lanham Act to provide for the registration of sound marks and color marks, as well as providing for the registration of marks that are used in international commerce. The Trademark Act of 1946 (Lanham Act) is amended by the 1999 Act, giving owners of well-known trademarks the power to contest or ask for the cancellation of a mark on both the principal and supplemental registers if it would dilute their marks. Additionally, it specifies the sole process for rejecting the registration of such a mark.
- The Madrid Protocol Implementation Act of 2002 amended the Lanham Act to provide for the registration of marks under the Madrid Protocol, which is an international treaty that provides for the registration of marks in multiple countries. This amendment Act permits a U.S. national, a person residing in the United States, or a person who has a real and substantial industrial or commercial establishment in the United States to submit an international application to the U.S. Patent and Trademark Office. Additionally, it mandates that the Commissioner of Patents and Trademarks transmit the application to the International Bureau of the World Intellectual Property Organization after certifying that the data contained in the international application matches that in the basic application or registration.
- The Singapore Treaty, which was adopted in 2006, amended the Lanham Act to provide for the registration of marks under the Singapore Treaty, which is an international treaty that provides for the registration of marks in multiple countries. The worldwide trademark system is modernized by the Singapore Treaty on the Law of Trademarks by extending the scope of what is protected to non-traditional marks like sensory marks, color, position, and movement marks, among others. Members may request that submissions be made online. Members are required to offer solutions to reactivate applications or registrations that were unintentionally canceled. The treaty also defines maximum standards for the recording, amending, or revocation of a license in order to protect the trademark application or registration. Countries may be parties to both the Singapore Treaty and the Trademark Law Treaty.
- Finally, the Anti-Counterfeiting Trade Agreement of 2011 amended the Lanham Act to provide for enhanced remedies for trademark counterfeiting and piracy. The agreement calls for robust legal structures and also contains novel elements that increase global cooperation and support effective IPR (intellectual property rights) enforcement procedures.
Thus, we can conclude that the Lanham Act plays a very important role in safeguarding trademark law in the United States of America. The Act protects trademarks and service marks for goods and services in the United States by being the primary federal law governing trademarks, including how to obtain and maintain a trademark registration. As noted above, damages could be tripled if ill faith is demonstrated. However, in lawsuits for trademark dilution, damages are only recoverable if the defendant knowingly profited from the plaintiff’s goodwill in the use of the mark.
Frequently Asked Questions (FAQs)
How are trademark rights acquired in the United States?
You must fulfill the requirements outlined above in order to obtain trademark protection; your mark must either be intrinsically distinctive or have acquired secondary meaning. You must also demonstrate actual use of the mark or an intention to use it in commerce. While it is not necessary to register your trademark with the USPTO, failing to do so will only give you protection under the common law, which is often only enforceable in the region in which you conduct business.
What are the elements of good faith in trademark use?
An important factor in determining whether a use is fair is whether it is done in good faith. When there is no intention to profit from the goodwill and reputation built up by the trademark owner, the use is deemed to have been made in good faith. The mere knowledge that the phrase being used is in fact, a trademark does not, in and of itself, disprove good faith.
The courts consider a number of considerations while deciding this. As an illustration, consider how different the packaging and labeling are, how different terminology can be used to describe the same products, and how confused buyers would likely be as a result of such continuous use.
What is protected by Lanham law in the United States?
Fundamentally, the goal of federal trademark law is to safeguard a company’s reputation by assisting customers in correctly identifying the source of the products or services they purchase. Symbols, words, phrases, images, sounds, and other representations that are utilized on products and services are protected by trademarks. A trademark cannot be applied for unless the goods or services are offered for sale.
What constitutes an infringement of a trademark in the USA?
Any claim of trademark infringement will always depend on what is known as the “likelihood of confusion.” The majority of the time, a mark only provides protection for a specific subset of goods or services, and the owner can only forbid the use of the mark in circumstances where it would negatively impact the owner’s market. Therefore, Apple Computers cannot forbid an apple juice company from using the name Apple to market apple juice through the use of trademark law.
- Thomas S. Leatherbury, Explosion of Lanham Act Cases, 1 Best ABA Sec.: GEN. PRAC., Solo & Small FIRM Sec. 20 (1997).
- Vrudhi Raimugia, Booking.com – A Pyrrhic Victory for Generic.com Trademarks?, 103 J. PAT. & TRADEMARK OFF. Soc’y 69 (2023).
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