A trademark is a designation used to identify and distinguish the goods of one person from those of another.[i] Trademark law generally encompasses several types of identifying marks, such as trademarks on goods, service marks and trade dress.[ii] Federal law governs trademarks under the Lanham Act, 15 U.S.C.[iii] Unlike patents and copyrights, the Constitution does not specifically grant Congress the power to regulate trademarks.[iv] Instead, Congress derives its authority to regulate trademarks from the Commerce Clause.[v] A trademark cannot be acquired by itself; it only exists with respect to some other commercial activity.[vi] Because of this requirement, at common law, trademarks could only be enforced within the geographic area in which the commercial activity of the owner was conducted.[vii] The Lanham Act creates a national system of trademark registration.[viii] It provides the process for registering a trademark with the PTO and the rights secured by registration, along with the causes of action and remedies for infringement of trademark rights. In addition to federal statutes, most states also have corresponding trademark statutes and registration systems providing for the procurement and protection of trademarks within state geographical boundaries.[ix]
The following article was written by Scott Harper and is part two of a multi-part series covering intellectual property rights in the United States.
Read part one here: Intellectual Property 101 - Patents.
Read part three here: Intellectual Property 101 - Copyrights.
Modern trademark law has two purposes: (1) to protect consumers from deception and confusion with regard to the origin of goods and (2) to protect the trademark as valuable property.[x] These two purposes represent an underlying rationale of economic efficiency.[xi] The first goal is simply one of consumer protection.[xii] When purchasing a product bearing a known trademark, a consumer should be confident that they will get the product he or she expects.[xiii] Trademark protection benefits consumers by lowering search costs[xiv] and allowing them to locate goods of consistent quality.[xv] The second purpose is aimed at protecting the trademark owner. Without trademark protection, consumers would not be able to trace quality products to their source.[xvi] Therefore, there is no incentive for sellers to invest in producing quality products, when competitors could reap the benefits of that investment.[xvii] Trademark protection allows a seller to distinguish its products from others and capitalize on the product’s quality, thereby enhancing the “goodwill” developed by the consumer’s association of the product branded by the trademark.[xviii] This encourages manufacturers to improve and maintain the quality of their goods and services associated with the trademark.[xix]
Common law trademark rights are established by use of the mark in connection with the distribution of a good or service. If one chooses not to register their trademark, their trademark rights are generally limited to the geographic area in which the unregistered trademark is known and recognized by potential consumers.[xx]
Although the acquisition of trademark rights does not require registration, there are many advantages in doing so. First, federal registration provides nationwide “constructive use” as of the filing date of the application, and also provides nationwide “constructive notice” to all later users.[xxi] This allows a registrant to overcome claims by later users that they adopted the same or similar mark in good faith. Finally, federal registration grants certain statutory presumptions not available at common law, such as the presumption of ownership, validity (i.e. that the mark is distinctive, not generic or merely descriptive) and right to exclusive use of the registered trademark in commerce for the designated goods or services associated with the trademark.[xxii] Another advantage to federal registration is that it affords the registrant the opportunity to use the federal courts under federal subject matter jurisdiction.[xxiii]
The Lanham Act provides that registration will be granted to distinctive marks.[xxiv] To analyze which words or symbols may be protected as trademarks, the PTO categorizes trademarks on a spectrum based on their relative distinctiveness.[xxv] The five categories, from most to least distinctive, are: (1) fanciful; (2) arbitrary; (3) suggestive; (4) descriptive; and (5) generic. The degree of distinctiveness determines the scope of protection that trademark law affords a trademark.[xxvi]
Fanciful, arbitrary, and suggestive marks are regarded as being inherently distinctive.[xxvii] Inherently distinctive marks are deemed to immediately perform as a trademark from the very first moment that are used as a trademark.[xxviii] A fanciful mark is a word that has been created or coined for the sole purpose of use as a trademark.[xxix] An example of this type of mark is EXXON.[xxx] An arbitrary mark is one that uses a word or symbol that is already commonly used, but applied to an unrelated good or service.[xxxi] A well-known example of an arbitrary mark is APPLE. The term “apple” is obviously an existing word used to describe a type of fruit. However, when used to describe a company selling electronic devices, the mark is arbitrary in this application. Suggestive marks suggest some aspect of the goods or services, but do not directly describe them.[xxxii] One example of a suggestive mark is the WET ONES brand of pre-moistened wipes.[xxxiii] The term WET ONES indirectly suggests a quality or function of the associated product without describing the specific product.[xxxiv]
A descriptive mark is one that directly and immediately describes or conveys some characteristic of the product or service.[xxxv] For example, Raisin-Bran is a descriptive mark because it directly describes the characteristics of the product.[xxxvi] Unlike fanciful, arbitrary, and suggestive marks, descriptive marks are not presumed to be distinctive.[xxxvii] They are entitled to trademark protection only if they have acquired secondary meaning.[xxxviii] In other words, descriptive marks must become distinctive of the applicant’s goods through use in commerce over a period of time.[xxxix] The existence of secondary meaning is a matter of fact.[xl] There are many sources of evidence that can help demonstrate the existence of secondary meaning, such as: how long the mark has been used, findings that the public associated the mark with the applicant’s goods, and whether a competitor intentionally copied the term.[xli] As a general rule, the more descriptive the term, the greater the evidentiary burden to prove that it has acquired secondary meaning.[xlii]
A generic mark is simply a common name for the product itself.[xliii] These types of marks can never receive trademark protection because they do not describe the origin of a product.[xliv] For example, the phrase “shredded wheat” is a generic term when used to describe a breakfast cereal.[xlv] The phrase is commonly used by the public to describe a type of breakfast cereal.[xlvi] Generic marks do not tell the buyer the source of the product, only what the product is, and therefore generic marks are not entitled to receive trademark protection.[xlvii]
The types of marks protected by trademark law are numerous. As discussed above, the term trademark is the general term to describe trademarks applied to goods and service marks associated with the provision of services.[xlviii] Trademarks and service marks appear in a variety of forms. Common types of trademarks include: an individual letter or group of letters;[xlix] numbers;[l] phrases or slogans;[li] and symbols, logos, and designs.[lii] Even aspects such as color, shape, sound, and fragrance may be protected as trademarks.[liii]
Trade dress consists of the total appearance of a product.[liv] It includes features such as “size, shape, color or color combinations, texture, graphics, or even particular sales techniques.”[lv] While trademarks and trade dress have historically been distinguished from one another, today the distinctions have largely disappeared.[lvi] Designations protectable as trade dress are often also protected as trademarks.[lvii] Historically, trade dress was classified as falling into two general categories: (1) product packaging and (2) product design. However, a more modern view has emerged with the focus of trade dress protection on the totality of the elements of the product in question.[lviii]
Trade dress is entitled to protection only when it is (1) distinctive and (2) not functional.[lix] Prior to 1992, proof of secondary meaning was required to obtain protection for all types of trade dress.[lx] However, in the 1992 Taco Cabana decision, the Supreme Court held that trade dress can be inherently distinctive and thus protectable under the Lanham Act without a showing of secondary meaning.[lxi] In 2000, the Supreme Court further clarified that product design trade dress cannot be inherently distinctive.[lxii] Therefore, a plaintiff asserting infringement of unregistered product design trade dress must prove that the design has acquired secondary meaning in the marketplace.[lxiii] However, the Court made it clear that non-product design trade dress can still potentially be inherently distinctive.[lxiv] The bar against protecting the functional aspects of a product derives from the intent to preserve the distinctions between patent and trademark law, as granting trademark protection to the functional feature(s) of a product would be contrary to the patent law and allow one to perpetually protect and exclude others from making, selling or using the protected functional feature.[lxv]
A U.S trademark registration lasts for a period of ten years from the date of registration for as long as the mark is continually used in commerce, provided that the appropriate affidavits of use are filed and the associated fees paid to the PTO.[lxvi] Registrants must file affidavits of continued use with the PTO between the fifth and sixth years after the date of registration. U.S. trademark registrations must be renewed every ten years thereafter by filing renewal documents with the PTO.[lxvii] If renewal documents are not timely filed, the trademark registration will lapse.
Trademark ownership or “priority” rights accrue through use of the mark in connection with the public distribution of goods or services in connection with the mark.[lxviii] In other words, the first one to use a mark in connection with a good or service will obtain senior ownership rights in the mark. Registration of a trademark does not confer an ownership right in the trademark, but will serve as constructive notice of a claim of ownership to the registered mark.[lxix]
Maintaining trademark rights rests on the principle of “use it or lose it” as use is essential to accruing ownership rights in the mark and “continuous use” is required under trademark law to maintain such rights against others. As the U.S. Supreme Court has recognized, “…the right to a particular mark grows out of its use, not its mere adoption; its function is simply to designate the goods as the product of a particular trader and to protect his good will against the sale of another’s product as his.”[lxx] If one stops using a trademark in the promotion of their goods or services, without the intent to resume use in the future, the trademark will be deemed “abandoned.” Under U.S. law, a period of three years of non-use of the mark is prima facie evidence of trademark abandonment, resulting in the potential loss of ownership rights in the trademark.
Ownership of a trademark may be transferred or licensed to another as a trademark and is considered property for which the owners enjoys the exclusive right to use in connection with their goods and services.[lxxi] A trademark assignment must be in writing to be enforceable and include the goodwill associated with the trademark.[lxxii] A trademark cannot be sold or assigned apart from the goodwill it symbolizes, as such transfers or assignments are considered as “in gross” and invalid.[lxxiii]
[i] J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 3:1 (4th ed. 2015) [hereinafter McCarthy on Trademarks].
[ii] Id. at § 3:1, § 8:1
[iii] Id. at § 5:4
[iv] In re Trade-Mark Cases, 100 U.S. 82 (1879).
[v] Id.
[vi] Arthur Miller & Michael Davis, Intellectual Property in a Nutshell 170 (5th ed. 2012).
[vii] Burger King of Fla., Inc. v. Hoots, 403 F.2d 904 (7th Cir. 1968).
[viii] 15 U.S.C. § 1051-72 (2012).
[ix] McCarthy on Trademarks, supra note 95, at § 22:10.
[x] Id. at § 2:2.
[xi] Id. at § 2:3
[xii] Id. at § 2:33
[xiii] Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 782 (1992).
[xiv] Ty Inc. v. Perryman, 306 F.3d 509 (7th Cir. 2002).
[xv] Falcon Rice Mill, Inc. v. Community Rice Mill, Inc., 725 F.2d 336, 348 (5th Cir. 1984).
[xvi] McCarthy on Trademarks, supra note 95, at § 2:4.
[xvii] Id.
[xviii] Id.
[xix] Id.
[xx] McCarthy on Trademarks at § 26:2.
[xxi] 15 U.S.C. § 1072 (2012).
[xxii] Id. § 1065.
[xxiii] Id. § 1121.
[xxiv] Id. § 1057, 1115(a).
[xxv] McCarthy on Trademarks, supra note 95, at § 11:1.
[xxvi] Id.
[xxvii] Id. at § 11:4.
[xxviii] Id.
[xxix] Id. at § 11:5
[xxx] Exxon Corp. v. XOIL Energy Resources, Inc., 552 F. Supp. 1008 (S.D.N.Y. 1981).
[xxxi] McCarthy on Trademarks, supra note 95, at § 11:11.
[xxxii] Id. at § 11:62.
[xxxiii] Platex Products, Inc. v. Georgia-Pacific Corp., 390 F.3d 158 (2d Cir. 2004).
[xxxiv] Id.
[xxxv] In re MBNA America Bank, N.A., 340 F.3d 1328, 1332 (Fed. Cir. 2003).
[xxxvi] Skinner Mfg. Co. v. Kellogg Sales Co., 143 F.2d 895, 898 (8th Cir. 1944).
[xxxvii] Two Pesos, Inc., 505 U.S. at 769.
[xxxviii] Id.
[xxxix] Id.
[xl] Zatarains, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786, 794 (5th Cir. 1983).
[xli] 20th Century Wear, Inc. v. Sanmark-Stardust, Inc., 747 F.2d 81, 90 (2nd Cir. 1984).
[xlii] American Heritage Life Ins. Co. v. Heritage Life Ins. Co., 494 F.2d 3, 12 (5th Cir. 1974).
[xliii] Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 116-17 (1938).
[xliv] Id.; Restatement (Third) of Unfair Competition § 15, comment a (1995).
[xlv] Kellogg Co., 305 U.S. at 116-17.
[xlvi] Id.
[xlvii] Id. at 119.
[xlviii] McCarthy on Trademarks, supra note 95, at § 3:1.
[xlix] See Gulf States Paper Corp. v. Crown Zellerbach Corp., 417 F.2d 795 (C.C.P.A. 1969).
[l] See William H. Keller, Inc. v. Chicago Pneumatic Tool Co., 298 F. 52 (7th Cir. 1923).
[li] See Volkswagenwerk Aktiengesellschaft v. Rickard, 492 F.2d 474 (5th Cir. 1974).
[lii] See Application of Esso Standard Oil Co., 305 F.2d 495, 497 (C.C.P.A. 1962).
[liii] See Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159 (1995).
[liv] Two Pesos, Inc., 505 U.S. at 764 n.1.
[lv] John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966 (11th Cir. 1983).
[lvi] McCarthy on Trademarks, supra note 95, at § 8:1.
[lvii] Id.
[lviii] Kendall-Jackson Winery, Ltd. V. E & J. Gallo Winery, 150 F.3d 1042, 1050(9th Cir. 1998).
[lix] Two Pesos, Inc., 505 U.S. at 769.
[lx] See e.g., Murphy v. Provident Mut. Life Ins. Co., 923 F.2d 923 (2nd Cir. 1990).
[lxi] Two Pesos, Inc., 505 U.S. at 764.
[lxii] Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 216 (2000).
[lxiii] Id.
[lxiv] Id. at 215.
[lxv] Qualitex Co., 514 U.S. at 165-66.
[lxvi] See 15 U.S.C. § 1058 (2012).
[lxvii] Id. at § 1059.
[lxviii] Hanover Star Milling Co. v. Metcalf, 240 U.S. 403,412 (1916).
[lxix] See 15 U.S.C. § 1127 (2012).
[lxx] United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918).
[lxxi] Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251, 259 (1916).
[lxxii] 15 U.S.C. § 1060(a) (2012).
[lxxiii] Id. § 1060; Sugar Busters LLC v. Brennan, 177 F.3d 258, 265 (5th Cir. 1999).
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