US Trademark Law
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Trademarks are distinguishing devices used by businesses to distinguish their goods and services from those produced by others. They are a basic form of intellectual property.
This text outlines trademark law as it applies in the United States.
- 1 Introduction
- 2 Types of protected mark
- 3 Trademarkability
- 4 Infringement
History of trademark law
Although trademarks are the oldest form of intellectual property and have been protected at common law for decades, they were the last to be protected by a federal statute in the US, and infringement cases were very rare until the late 19th century.
The first trademark statute, enacted in 1870, was struck down by the Supreme Court in The Trade-Mark Cases, 100 U.S. 82 (1879), for exceeding the powers granted by the patent and copyright clause of the Constitution. Congress responded with the Trademark Act of 1881, which was based on its Commerce Clause powers.
The current federal trademark statute is the Lanham Act of 1946, codified in Title 15 of the United States Code.
® or ™ or ℠?
The Lanham Act establishes a procedure for federal registration of trademarks. If a trademark meets certain qualifications, it can be listed on the Principal Register, which affords it many benefits. Other trademarks can be listed on the Supplemental Register, which exists to allow trademarks not otherwise registrable in the United States to be registered from foreign countries that require home-country registration first, and to allow registration for descriptive marks not distinctive enough to qualify for the Principal Register. Registration is not mandatory to receive trademark protection, but federal trademarks on the Principal Register receive significantly stronger protection than unregistered trademarks. Federal registration is not mandatory to receive trademark protection, but a mark owner seeking to enforce trademarks in US federal court needs either a federal registration or a violation of the Lanham Act's specific sections on false advertising or unfair competition.
Federal registration is limited to trademarks and service marks being used by the mark owner in interstate commerce. Among other criteria, federal registered trademarks may not be "immoral, deceptive or scandalous," or "disparage or falsely suggest a connection with persons, institutions, beliefs or national symbols." They may not be "merely descriptive," "deceptively misdescriptive," "primarily geographically misdescriptive," "primarily merely a surname," or "functional" without proof of secondary meaning. See 15 U.S.C. § 1052.
In addition to federal registration, each of the fifty US states has its own system of trademark registration. If a trademark meets the state's qualifications, it can be listed on the state's registry of trademarks. State registration is not mandatory to receive trademark protection or to use a state's court system to enforce trademark rights. The US federal and state trademark registration systems co-exist side-by-side. It is possible for a state-registered trademark, or a common law unregistered trademark, to have rights superior to a trademark with a valid federal registration, due to an earlier date of adoption combined with actual and continuous use.
Only trademarks on the Principal Register and the Supplemental Register can be marked with the ® symbol to denote their higher level of protection. Any trademark, including unregistered trademarks or trademarks on the Principal or Supplemental Register, can be marked with the ™ or ℠ (service mark) symbol. These symbols exist to place third parties on notice that they may infringe the trademark by using it without authorization.
Types of protected mark
Trademark law protects marks. Marks can be words, names, symbols or devices. They come in several classes:
Strictly speaking, a trademark is a mark that distinguishes one person's goods from others'. In practice, the word "trademark" is often used to refer to any class of mark that is protected under trademark law.
A service mark is similar to a trademark, except that it is used to distinguish one person's services from others'. Service marks are registrable in the same manner as trademarks and are denoted by the ® symbol once they are registered on the Principal or Supplemental Registers. If they are not registered, they often carry an SM symbol.
A trade name is a mark used to identify a business, as opposed to a good or service. The Lanham Act does not allow trade names to be registered unless they also function as trademarks or service marks by identifying the source of a good or service. However, many states allow trade names to be registered and protected under state law.
A certification mark is a mark used to certify a good in some way, regardless of its specific source. Seals of approval (e.g. the Good Housekeeping Seal of Approval) and marks of origin (e.g. Roquefort cheese) are examples of certification marks. A certification mark is held by an organization and is protected under trademark law so long as the holder establishes a standard for awarding the mark and polices that standard effectively.
A collective mark is a mark held by a group for the use of its members. Examples include union stamps and franchise marks. Collective marks are treated like regular trademarks and service marks under the Lanham Act.
Trade dress and product configuration
Trade dress refers to the distinctive packaging of a product. One example of trade dress is the decor of a restaurant chain. Trade dress is protected if it is inherently distinctive.
Product configuration refers to the distinctive design and shape of a product. The best-known example is the glass Coca-Cola bottle. A product configuration must have secondary meaning to be protected, regardless of whether it is inherently distinctive or not. Secondary meaning means that the appearance of the product should indicate its source to a consumer.
Both trade dress and product configuration can be registered as trademarks, but they are more often protected without registration as a "false designation of origin" under 15 U.S.C. § 1125(a). They pose special problems in trademark law because of their non-verbal nature. Words are easy to protect: more abstract designs are not.
Marks in the form of words can be classified as either arbitrary, fanciful, suggestive, descriptive or generic. The nature of the mark determines the extent to which it is protected by law.
Arbitrary, fanciful and suggestive marks
A "fanciful" mark has no meaning other than its meaning as a trademark. Examples include Xerox copiers, Lego bricks and Verizon phones. "Arbitrary" marks have a separate meaning, but that meaning has nothing to do with their use as a trademark. Examples include Apple computers, Diesel jeans and Shell gasoline. "Suggestive" marks suggest a characteristic of a good or service without actually describing that characteristic. Examples include Coppertone sunblock, Earthlink internet service and jetBlue airline service.
Arbitrary, fanciful and suggestive marks receive highly similar treatment under the law. They are the strongest types of mark in that their holders do not need to prove a secondary meaning in order to protect the mark. Because there is no reason to associate Apple with computers, outside of the popularity of computers made by Apple Computer, third parties have few legitimate reasons to use the name "Apple" on their computers.
A "descriptive" mark is one that identifies a characteristic of the article or service it marks. Examples include American Airlines (a geographic mark) and Dell Computer (a surname mark). Descriptive marks cannot be registered without proof that the mark has a secondary meaning in the eye of the consumer public.
Even if a descriptive mark has a secondary meaning, its descriptive nature makes it possible to avoid trademark infringement liability through a fair use defense. A person could, for instance, use "American Airlines" in a commercial context to refer to airlines from America, so long as they were not using the term in its trademark sense.
Generic marks, like "laptop computer," cannot receive trademark protection even if they have a secondary meaning. The rule against generic trademarks is particularly important for holders of famous marks, because their marks may lose protection if they become common nouns or adjectives in the public eye. Formerly-trademarked words like "aspirin" and "cellophane" have lost their protection due to genericide. Genericide is discussed in detail in the Defenses section.
A mark need not be a word or phrase. Besides trade dress and product configuration, discussed above, trademarks can also be found in sounds (e.g. the NBC chimes), colors, fragrances, and other distinctive features of a product. The most important criteria in determining their trademarkability is secondary meaning (whether the feature denotes origin to consumers) and whether the feature is functional. Functional features are not trademarkable: they must be protected under patent law if they are to be protected at all.
Generally speaking, the owner of a mark is the person who is first to use that mark in commerce. This is known as the race to the marketplace test. For unregistered marks, protection only extends to the areas where marked products are sold or advertised, where their reputation is established, or where the owner is reasonably expected to reach in the normal expansion of their business. Registered marks automatically receive nationwide protection regardless of where they are used.
If two people use the same mark in the same region, the right to use the mark will be given to the first person to use the mark in that region. If one of the marks is registered, the unregistered mark will only prevail if it was in use before the application for the registered mark was filed, and the unregistered mark will only prevail in the area(s) where it was in use.
Confusion is one of the main grounds for a trademark infringement claim. It can take many forms, but the basic inquiry generally involves the same questions:
- How strong is the mark being defended?
- How similar are the products in question?
- How similar are the marks in question?
- Have consumers actually been confused?
- Which marketing channels have been used?
- How likely is the consumer to exercise care when purchasing the products in question?
- What was the defendant's intent in selecting the mark?
- How likely are the product lines to expand?
See AMF v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979). Different circuit courts use slightly different tests in determining likelihood of confusion.
Infringement by confusion can involve:
- Confusion between related products. If one product is offered under a mark similar or identical to another, and the products would be confused by the buying public if sold under the same mark, trademark infringement can be found. Examples from actual infringement cases include Slickcraft and Sleekcraft boats, Bonamine and Dramamine medications, Pledge and Promise cleaners, and Duron and Durox paints.
- Confusion as to source. Confusion can also be found when the same or similar mark is applied to different types of goods. One early case, involving Borden milk and Borden ice cream, was deemed to be non-infringing in 1912; in more recent years, such cases have routinely led to findings of infringement.
- Confusion as to sponsorship. Even where consumers are unlikely to be confused as to source, they may be confused as to sponsorship. Team logo merchandise is a common example; consumers may expect that they are supporting the New York Yankees by purchasing a Yankees cap.
- Initial interest confusion. Sometimes, famous marks are used to lure consumers to different businesses. "Cybersquatting" by registering a well-known trademark as a domain name is one well-known example. Another is the use of meta tags to fool search engines: a little-known adult Web site may attempt to attract visitors by showing up in web searches for more well-known adult entertainment franchises. Both activities can be considered trademark infringement by confusion.
- Post-sale confusion. Post-sale confusion is often used to find infringement in counterfeit goods, such as fake watches and handbags. While the purchaser is likely to understand that they are buying a counterfeit product, the aim is to confuse others into thinking the product comes from a different source.
- Reverse confusion. Although confusion cases generally involve a little-known business using a well-known mark, confusion can also be found when a well-known business uses a little-known mark.
Trademark infringement can also be found in the absence of any confusion at all. Many trademarks are deemed to have a distinctive quality, and any third-party use that diminishes this distinctiveness is considered to be dilution, which is an independent cause of action from traditional infringement. Traditional types of distinction include blurring, in which the diluter lessens the ability of the mark to uniquely identify one source of goods or services, and tarnishment, in which the diluter associates the mark with scandalous or obscene material, thus attacking the good character of the mark or its owner.
The textbook case of dilution is Eastman Photographic Materials v. Kodak Cycle, 15 R.P.C. 105 (Eng. 1898), in which the maker of Kodak cameras brought suit against a company producing Kodak bicycles. There was little chance of cameras being confused with bicycles: the risk was removing the Kodak name's association with cameras.
The Federal Trademark Dilution Act of 1995 added a dilution statute to the Lanham Act. Dilution can be found whenever a "famous mark" is used by another, "if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark." 15 U.S.C. 1125(c). However, a recent law has made significant changes to the Federal dilution statute. 
Trademark law has a contributory infringement doctrine similar to those under patent law and copyright law. Unlike its sister doctrines, however, contributory infringement of trademarks is not a very well-developed doctrine. It has come up in a few contexts, including cybersquatting liability and liability for landlords whose tenants sell counterfeit goods.
Defenses to infringement
Many trademarks have been invalidated because they have lapsed from fanciful, arbitrary, suggestive or descriptive status to generic status. Genericide is a defense to trademark infringement: the use of a trademark that has become generic over time is not infringement. Examples include:
- aspirin; Bayer Co. v. United Drug Co., 272 F. 505 (S.D.N.Y. 1921).
- cellophane; DuPont Cellophane Co. v. Waxed Products Co., 85 F.2d 75 (2d Cir. 1936).
- shredded wheat; Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938).
- thermos; King-Seeley Thermos Co. v. Aladdin Industries, 321 F.2d 577 (2d Cir. 1973).
- Murphy bed; Murphy Bed Door Co. v. Interior Sleep Systems, 874 F.2d 95 (2d Cir. 1989).
- Pilates; Pilates, Inc. v. Current Concepts, Inc., 120 F.Supp 2d 286 (S.D.N.Y. 2000).
- Pilates Studio; Pilates Method Alliance, Inc. v. Pilates, Inc., Opposition No. 91154584 (TTAB 2004).
Many companies, notably Xerox, Jeep and Lego, have active campaigns to avoid the genericide of their trademarks: they insist that their marks be used as adjectives, not nouns, so as to avoid their trademarks becoming common terms for copying machines and interlocking blocks respectively. Xerox regularly engages in corrective advertising. In the late 1980's, Jeep after being acquired by Chrysler convinced the automobile industry to adopt the term SUV for 4-wheel drive vehicles, and has since engaged in a continuous advertising that "There is only one Jeep" to reinforce the JEEP brand.
The original Trade-Mark Cases invalidated Congress's first trademark statute on the grounds that trademark authority could not be based on the patent and copyright clause of the Constitution. There is still a sharp divide between patent and trademark law, illustrated by the doctrine that functional marks cannot be protected as trademarks. As stated above, functionality is most common when defending claims for infringement of trade dress and product configuration.
Under the Lanham Act as amended in 1994, a mark is deemed "abandoned" "when its use has been discontinued with intent not to resume such use." Nonuse for three consecutive years is considered prima facie evidence of abandonment. 15 U.S.C. § 1127.
Some famous trademarks have been preserved through minor use by other companies. US Airways, for instance, preserves the trademarks of well-known but defunct Piedmont Airlines and PSA by operating some of its commuter flights under those names, and Chevron maintains the Standard Oil trademark by operating a small number of its filling stations under the Standard name.
Use of a mark is only infringing if the mark is used as a mark. For instance, mentioning a mark in an article is generally not infringement. Using a mark as the basis of a song is generally not infringement ("Barbie Girl"; see Mattel v. MCA Records, 296 F.3d 894 (9th Cir. 2002)). Likewise, mentioning a mark in the title of a work, as in The Lexus and the Olive Tree or The Devil Wears Prada, is generally not infringement. However, using Star Trek in the title of an unauthorized book about Star Trek would likely infringe the mark, since the mark is used on other books authorized by its holder.
Injunctions are a standard remedy for trademark infringement. The usual injunction is to halt production and sale of infringing goods and services.
In some cases, the court might also award an injunction for corrective advertising, which forces the defendant to pay for an amount of advertising necessary to reverse the damage to the plaintiff's mark.
Under 15 U.S.C. § 1117, a court may award damages for trademark infringement reflecting some combination of the following factors. Trebled damages are available for damage amounts derived from defendant's profits, actual damages plaintiff sustained, and cost of bringing the lawsuit.
- defendant's profits (15 U.S.C. § 1117(a)(1))
- damages sustained by the plaintiff (15 U.S.C. § 1117(a)(2))
- cost of bringing the lawsuit (may include attorney's fees) (15 U.S.C. § 1117(a)(3))
- prejudgment interest (15 U.S.C. § 1117(b))
- statutory damages (15 U.S.C. § 1117(d)
Plaintiff is required only to prove the amount of defendant's sales. The burden then shifts to defendant to prove up its costs and expenses to be deducted from the total sales amount to give the amount of defendant's profits. If the court finds the recovery amount based on defendant's profits is inadequate or excessive, the court may enter judgment a sum it believes is just in light of the "circumstances of the case."
Damages Sustained by Plaintiff:
Plaintiff must prove up its actual damages. The court bases its determination of damages on the actual amount of damages plaintiff's has proven or any sum above that amount but not more than three times above the actual damage amount.
Costs of the Action:
The court may also award reasonable attorney's fees to the winning party but only in exceptional circumstances.
Trebling of Damages:
In the case of a counterfeit mark or designation (as defined in 15 U.S.C. § 1116(d)), non-statutory damage amounts are to be trebled unless the court finds "extenuating circumstances." Note that Congress intended for courts to award trebled damages in most cases.
Specifically, the Lanham Act says where plaintiff has proven any violation of 15 U.S.C. § 1114(1)(a) or 36 U.S.C. § 220506, a court shall enter judgment for three times such profits or damages, whichever amount is greater, together with a reasonable attorney’s fee, if the violation consists of:
- (1) intentionally using a mark or designation, knowing such mark or designation is a counterfeit mark (as defined in 15 U.S.C. §1116 (d))), in connection with the sale, offering for sale, or distribution of goods or services; or
- (2) providing goods or services necessary to the commission of a violation specified in paragraph (1), with the intent that the recipient of the goods or services would put the goods or services to use in committing the violation.
The court may also award interest beginning from the date of the service of the plaintiff’s pleadings setting forth the claim for such entry of judgment and ending on the date such entry is made, or for such shorter time as the court considers appropriate. (See 26 U.S.C. §6621 (a)(2) for method of determining interest rate).
15 U.S.C. § 1117(c) provides a plaintiff the option of electing (before final judgment) recovery of statutory damages for any such use. The statutory damages are based upon the "willfulness" of the counterfeit:
- (1) if the court finds the use of the counterfeit mark was not willful, the statutory damages will be not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just; or
- (2) if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just.
This statutory amount is in lieu of and not in addition to profits or actual damages; and is not subject to trebling under 15 U.S.C. § 1117(b).
Knowingly copying another's trademark is considered counterfeiting and is a felony punishable by fines and imprisonment under 18 U.S.C. § 2320.