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GENERAL IP
Patent:
Must be (1) novel, (2) non-obvious, (3) utility, (4) description of product / process
- If so get right to exclude others for up to 20 years from application
- Must be issued by PTO
- Fear of injunction makes the patent valuable
Copyright:
Must be (1) creative (music, writing, etc), (2) non-functionality,
- Lasts for the life of author + 75 yrs or 95 yrs if institutional author
- Rights begin immediately at time of fixation / recording
o Need registration to get rights to court & statutory damages
Infringement: (1) Evidence of copying (access)
(2) Substantial Similarity (sameness)
Defenses: - Fair Use
TRADE SECRET PROTECTION
Introduction
Elements of a trade secret suit:
(1) presence of a trade secret by definition – secret and valuable
(2) Misappropriation
(3) Π took reasonable precautions to protect the secret.
Theory
Property Rights – Trade Secrets are property and should be protected as tangible property, so as
to encourage further investment in such information (utilitarian theory)
Tort Law – A violator of trade secret laws should be punished for acting in bad faith and
violating the confidence of their relationship with the plaintiff.
Subject Matter
Defining Trade Secrets p. 34
- No requirement of novelty or non-obviousness
Uniform Act: “Trade Secret” means information, including a formula, pattern, compilation,
program, device, method, technique, or process, that:
(i)
derives independent economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons who
can obtain economic value from its disclosure or use, and
(ii)
is the subject of efforts that are reasonable under the circumstances to maintain its
secrecy.”
Current trend is to protect by trade secret any valuable information
- Show current commercial value of the secret
- Show a cost in developing the secret or process
Metallurgical Industries
Information must be secret – not generally known to all
Restatement of Torts – factors in determining if a trade secret exists
1. Extent to which the information is known outside the Π’s business
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Extent to which it is known by employees and others involved in business
Extent of measures taken by the claimant to guards the secrecy of the information
Value of the information to the business and its competitors
Amount of effort or money expended by the business in developing the info
Ease or difficulty with which the information could be properly acquired or
duplicated by others.
Reasonable Efforts to Maintain Secrecy
- Physical Enforcement (bouncer, cameras) will make a better case of a trade secret
- Rockwell – Better case if:
1. Don’t tell lots of people
2. Make sure others cannot find information – walls, encryption
3. Confidentiality agreements with any disclosures
- Look to the industry standard for how to maintain secrecy
- During discovery proceedings, Π must notify Δ that information is confidential to demonstrate
its trade secret value
Disclosure of Trade Secrets
- Public disclosure of a trade secret destroys its protection forever
1. By publication in a journal or otherwise
2. By selling a commercial product that embodies (and fully discloses) a readily
apparent secret
3. By someone other than the trade secret owner
4. Inadvertently – by accidentally being left in public view
5. As required by a government agency – Monsanto Case
Misappropriate of Trade Secrets
Uniform Act: Will be misappropriation if taken
(1) by improper means OR
(2) where taking involves a material breach of confidence.
- Generally requires that the violator acquired the secret wrongfully.
Improper Means
Uniform Act: “Improper means” includes theft, bribery, misrepresentation, breach, or
inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other
means.” – common law standards are fluid depending on technology, etc.
DuPont v. Rolfe Christopher
- Using a helicopter to photograph an under-construction factory is improper means
- Action need not be a trespass, other illegal conduct, or a breach of a confidential r’ship
- improper means are “means that fall below the generally accepted standards of commercial
morality and reasonable conduct.”
- Documented independent development of the process is ok means.
Confidential Relationship
- Even if obtained properly, a trade secret can be misappropriated if it is used improperly
- generally these relationships are formed by a written confidentially agreement
Smith v. Dravo
- a confidential agreement can be implied from the nature of the parties’ relationship
Restatement (Third) – There is a confidential relationship if:
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(a) the person made an express promise of confidentiality prior to the disclosure of the trade
secret;
(b) the trade secret was disclosed to the person under circumstances in which the relationship
between the parties to the disclosure or the other facts surrounding the disclosure justify
the conclusions that, at the time of the disclosure,
(1) the person knew or had reason to know that the disclosure was intended to be in
confidence, and
(2) the other party to the disclosure was reasonable in inferring that the person
consented to an obligation of confidentiality.
Reverse Engineering
- Buying a product, and taking it apart to see how it works is not “improper means”
- Manufacturer could protect himself by selling each product w/ a “no peek” clause
Chicago Lock
- California courts allow trade secrets to be discovered by “fair and honest means”
Departing Employees
- Employer may not inhibit the manner in which an employee uses his or her knowledge, skill,
and experience – even if these were acquired during employment.
- Employee cannot divulge trade secrets gained during the confidential ER / EE relationship
Non-compete Agreements – are enforced if reasonable in protecting ER’s interest, and not
unreasonable restraint on EE.
Wexler v. Greenberg
To win against an ex-employee, the employer must show:
(1) a protectible trade secret; and
(2) a legal basis upon which to sue, either a covenant or a confidential relationship.
“trailer clauses” (agreements to assign rights of EE’s inventions to ER) are treated to the same
analysis as non-competes
Agreements to Keep Secret
Warner-Lambert (Listerine Case)
- A license of a trade secret is enforceable as written if clear, and unambiguous, even after the
trade secret has been discovered. – this law is the opposite if patent had been at issue.
Remedies
Uniform Act:
Sec. 2: (a) injunction against violator, (2) forced royalty payments, (3) affirmative acts of
protection
Sec. 3: (a) damages for actual loss by misappropriation or unjust enrichment, (2) double treble
damages if misappropriation is willful and malicious
Sec. 4: Attorney’s fees if either side acts with bad faith or willful and malicious
misappropriation.
- Injunctions will usually last for as long as it would’ve taken Δ to reverse engineer
- Problem of determining the appropriate time.
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TRADEMARKS AND TRADE DRESS
Introduction p. 557 - 65
Purpose: to reduce information and transaction costs by assuring customers know the nature and
quality of a product before the purchase
Theory: TM act as tort protection against misappropriation of goodwill and consumer deception.
Protects investment in (1) creating the mark, (2) advertising, (3) product costs
Now protected under state common law and Lanham Act (1946)
What can be protected
How to prove protectibility (ex. Harley engine roar):
(1) Public associates mark with the source (Π)
(2) The mark has no function – product could be as good (better) if mark not used.
(3) The mark suggests (through secondary meaning) the Π and not any other
Economics
Trademarks, Trade Names, Service Marks
Lanham Act: TM includes “any word, name, symbol, or device, or any combination thereof – (1)
used by a person, or (2) which a person has a bona fide intention to use in commerce, and applies
to register on the principal register established by this Act, to identify and distinguish his or her
goods, through a unique product from those manufactured or sold by others and to indicate the
source of the goods, even if that source is unknown.”
Service Marks are defined identically to TM, except they refer to service not a product.
Trade Names – are names that identify the company themselves, and are not available for
registration.
Color, Fragrance, Sounds
- Shapes, sounds, fragrances, and colors can all be TMs under the Lanham act def.
Qualitex 115 S.Ct. 1300
- TM rights are available for a particular color, alone.
- color is a descriptively distinctive mark, w/ secondary meaning, and is not functional
- Δ’s assertion of color depletion is not a problem
- if there are too few available colors, then the color would be a functional competitive advantage
- Δ can still argue that the color is functional, so TM is invalid
Crescent Tool
- The “look and feel” of the product is protectible as a trademark.
Hand: TM is violated if the public is motivated to buy the product b/c of the TM source. Δ
needs only to distinguish its product from the Πs.
Certification and Collective Marks
- generally used by trade associations or other groups to identify a group of goods
- like French makers of sparkling wine – Champagne
- Franchising agreements
- Have the same rights as ordinary TM
Trade Dress and Product Configurations
- the design and packing of materials OR
- The product configuration if it serves the same source-identifying function as the TM
- Can be protected w/o registration like TMs or under §43(a) see p. 577.
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Establishment of Trademark Rights
- protection awarded to those who were first to use the distinctive mark in service.
D.C. Comics
- There must be a public association b/w mark and source to maintain TM rights
- TM rights end when there is no association
Distinctiveness
- TM must be distinctive to gain protection
- Marks in the 1st two categories (arbitrary / fanciful and suggestive) and “inherently
distinctive”, and receive automatic protection.
1. Arbitrary / Fanciful (ex. Exxon, Kodak)
- TM bears no relationship whatsoever to the product it describes
- Are always protected
2. Suggestive (ex. Coppertone)
- TM suggests a product in people’s minds
- Are always protected
3. Descriptive (ex. Quiet-Cool)
- TM that directly describes something about the product or service in connection with which it
is used as a mark
- Need secondary meaning to get protection –
- Exists when buyers associate a product with a single (though anonymous) source
- Public need not know the identity, only that the product comes from a single source
- Generally shown by evidence of advertising expenditures, consumer surveys, commercial
success of the product, and attempts at imitation.
- Secondary meaning must be established at the time the junior user infringes to have claim
- Some courts (2nd Cir.) do not require secondary meaning if there are other equitable factors
favoring the TM owner.
Zatarain’s (5th Cir. 1983)
TM is descriptive under the following factors:
(1) If the dictionary defines the TM in a similar sense.
(2) if standing alone it conveys info as to the characteristic of product
(3) If competitors would need to use the term to describe their product
(4) If other companies have actually used the TM in their product
“Fish-fry” has accumulated secondary meaning in the particular market.
4. Generic (ex. aspirin, cellophane)
- Marks are so associated with a particular product class that they have become the natural way
to refer to that type of product
- Never get TM protection
Distinctiveness of Trade Dress and Product Configuration
Two-Pesos (S.Ct. 1992)
Trade Dress for product packaging can be inherently distinctive (i.e. arbitrary / fanciful or
suggestive) and would not need secondary meaning to be given TM protection.
- trade dress still must be non-functional and distinctive under §43(a)
Wal-Mart (S. Ct. 2000)
Product design trade dress will only be distinctive, and attain protection under §43(a), upon a
showing of secondary meaning – distinguishes itself from Two Pesos
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- if the trade dress is ambiguous b/w product design and product packaging, the dress should be
considered product design and required to show secondary meaning.
Priority
In general, the senior user of a protected mark can bring an action against a junior user of the
same mark.
Use is determined by who is first to “use in commerce” under §45(a) TM definition.
Zazu v. L’Oreal
L’Oreal won the fight as first user
- L’Oreal had applied to register and put product on nationwide market before ZHD applied for
registration – L’Oreal “used in commerce” first by nationwide marketing
- §43(a) gave TM rights when owner had “intent to use,” before even actual use
- At common law – TM rights granted at use of mark in association with a good or service
Brookfield v. West Coast
- same arguments in cyberspace (not discussed in class)
Trademark Office Procedures
Principle Register benefits to TM holder:
1. nationwide constructive use – prevents anyone else in entire country from using
TM right
2. possibility of becoming incontestable after 5 years
3. Right to bring a federal claim w/o grounds for federal issue or diversity
4. Right to bar importation of infringements at customs
5. May recover attorney’s fees and treble damages if willful.
Supplemental Register befits to TM holder:
1. Allows TM status in other countries, even if no TM rights in U.S
2. Gives no other advantages beyond common law.
Grounds for Refusing Registration
- a number of grounds are cited in Lanham §2
- Including: (a) immoral, deceptive, or scandalous matter, (b) the flag of U.S. or other, (c)
a name of another person, (d) any already registered mark, (e) is merely descriptive, is
geographical primarily, geographically misdescriptive, a surname, or functional.
- Those under (e) can get approval w/ secondary meaning.
Hargo (Washington Redskins)
Court cancels TM registration b/c Π showed that mark may disparage Native Americans
- Still hold common law rights, just no registration
In re Nantucket
- the mark is not “primarily geographically deceptively misdescriptive”.
- no indication that public would think TM refers to origin of Nantucket, MA
Taylor Wine Co.
- a junior user has a right to use his name, which is weighed against senior users right.
Opposition
§31(a) - “any person who believes he would be damaged by the registration of a mark” can file
an appeal w/in 30 days of publication
Cancellation
- procedure in Redskins case – still retain common law rights
Concurrent Registration
Generally, registration of an already registered mark is not permitted
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- unless the senior user agrees
- Junior user must show that customer confusion will not result.
Incontestability
If “incontestable” (used for 5 years after registration w/ filing paperwork) under §15, the mark
cannot be attacked for lack of secondary meaning, unless one of 7 conditions in §33(b) apply.
- Cannot challenge a noncontestible mark on sole basis that it is only descriptive w/ no secondary
meaning. – must be one of seven grounds listed above.
- Any challenge must be w/in 5 years of registration
Extension Overseas: International Practice
-US is a member of the Madrid Protocol (MP)
Gray Market Goods
- Statute prohibits importation of goods bearing a registered US TM w/o consent of the domestic
TM owner, even if the goods are genuine and even if imported by a licensed manufacturer (or the
original TM owner itself.)
- B/c of market conditions / currency rates, etc. these gray goods may be sold cheaper than the
U.S. equivalents
Bourjois & Co. v. Katzel
Π is getting harmed b/c he paid to be exclusive licensee, but other is selling same product
Prestonettes
There still must be public confusion to have infringement
- Non-TM owner is permitted to resell good with the mark after the first sale
- second-seller must re-label in a clear way
Champion Spark-plug
- selling refurbished TM goods is ok, as long as there is no deception
Infringement
Likelihood of Consumer Confusion
General Standard: Common Law and §63(a) require Π (senior user) to prove that Δ(junior user)
is likely to cause customer confusion.
Factors from AMF v. Sleekcraft Boats
1. Strength of the mark
2. proximity of the goods
3. similarity of the marks
4. evidence of actual confusion
5. marketing channels used
6. type of goods and the degree of care likely to be exercised by the purchaser
7. defendant’s intent in selecting the mark;
8. likelihood of expansion of the product lines
Reverse Confusion
- if junior user (big guy) used the mark w/ more success than the senior user (little guy),
the big guy gets the mark
Can win a claim with a showing of “initial confusion”
Ex. Putting “Playboy” in website HTML so page gets lots of hits
Source Confusion
- even if no confusion as to the actual product, customers may be confused as to the source,
which is actionable.
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Confusion as to sponsorship
Conopco v. May
- Majority issues a re-finding of the facts based on clear error standard.
Dilution
Lanham Act, and about half of state statutes support a claim when there are TM rights, but no
claim of customer confusion. – added to the Lanham Act is 1996.
Act: “The owner of a famous mark shall be entitled, subject to the principles of equity and upon
such terms as the court deems reasonable, to an injunction against another person’s commercial
use in commerce of a mark or trade name, if such use begins after the mark has become famous
and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is
provided in this subsection.” See factors on p. 694.
Types of dilution: (1) blurring, (2) tarnishment
Π needs to show either actual dilution or likelihood of dilution – split in Victoria’s Secret
Π must show that the mark is famous
Π must show some minimum level of distinctiveness to win on the claim
Difficult to show actual dilution
1. Sales may not reflect dilution
2. The dilution will have already happened and mark has been weakened
- this could lead to genericide of the mark from the dilution
Nabisco v. Pepperidge Farms (Goldfish Case)
- the more qualities that are associated with the “product” the fewer are left with the “mark”
- Δ wants orange, and cheddar and shape all to be part of the product (cracker), while Π wants
orange, and shape, and even cheddar to be part of the mark.
- This mark was sufficiently distinctive to win on the confusion claim
Contributory Infringement
Elements:
1. Infringement by somebody
2. How closely did Δ participate in the infringement?
a. Willful blindness toward acts of infringement by Δ – Inwood (subjective std)
- std. must be satisfied for atty’s fees and treble damages.
b. Δ knows or has a reason to know of infringement (objective std)
- would a reasonable person have known of infringement
- “reason to know” is generally enough for contributory infringement
Strategic implications:
- use when the infringing party is judgment proof – and contributor has $
- use when infringing party may be future customer – no need for ill-will
The best Π’s remedy is an injunction – to be supplemented with damages as above.
Polo v. Chinatown Gift Shop
Landlord is liable for contributory negligence of trademark infringement by retail shop operator
- Manufacturer can be liable for pharmacist’s trademark infringement - Inwood
Hard Rock
- On remand, Π must show that Δ, flea market owner, knew or was willfully blind to the retailers
who sold infringing Hard Rock t-shirts.
- case is on remand b/c Appellate court used negligence, not willful blindness standard.
- Π can collect attorney’s fees and treble damages, if Δ is an “intentional infringer”
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Defenses
Genericness
- Marks are either generic originally (aspirin) and so cannot get TM protection, or they become
generic over time and lose their protection (Murphy bed)
Court will look to:
1. PTO decisions
2. dictionary meaning
3. Public Use (secondary meaning – newspapers / magazines)
Prevent genericide: Police mark; notify public; lobby dictionaries – ex. Xerox ad
Murphy Door Bed
- No IP rights in the term “Murphy bed” because the term had become generic
- Δ met his burden of proving that public has expropriated the term
Functionality
- If a mark is functional it has no protection – subject to opposition or cancellation from registry
A TM may be aesthetically functional if “exclusive use of the feature would put competitors at a
significant non-reputation related disadvantage.”
Morton-Norwich
- The bottle design is not functional, so it may be trademarked if distinctive
- existence of patent may be evidence of functionality, but not conclusiveness.
Stormy Clime v. ProGroup
- There may be a group of functional features, that are arranged in a unique, non functional way,
which would amount to a trademarkable arrangement, not subject to the functionality exception.
Traffix Devices
- Presumption that an existing utility patent will prevent a TM claim under the functionality
defense.
Abandonment
Will lose TM rights if “use has been (1) discontinued with (2) intent not to resume”
- intent not to resume may be inferred from the circumstances
- 2 consecutive years of non-use is prima facie abandonment
- Use must be the bona fide use of the mark in trade, not just warehousing
- Also, acts of omission that cause the mark to lose significance will be abandonment
MLB (Brooklyn Dodgers Bar Case)
- There was abandonment because Π no longer used the term “Brooklyn Dodgers”
- Holder will lose the mark if it attempts to “warehouse it” by keeping without using
- Must have continued minimal use.
Nontrademark or “Nominative Use” (Fair Use)
- Doctrine allows junior use of a descriptive TM if the mark is “used fairly and in good faith only
to describe to users the goods or services of such party, or their geographic origin.” Zatarain’s
- fair user must use mark in ‘descriptive’ not TM sense to be exempted.
- Δ has better fair use case if spelled, packaged differently – distinguished from senior user
New Kids on the Block
Junior user is ok if:
1. Product or service is one not readily identifiable without the TM
2. Only so much of the mark may be used that is reasonably necessary to id the product
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3. User must not do anything that would suggest sponsorship or endorsement by the mark
owner
Parody
- The 1st Amendment protects some dilution and infringement of a TM
- Δ has a “better” case if the use is non-commercial in nature.
L.L. Bean (High Society Case)
- If Δ had used TM to sell other products, would have been a problem
- But, article labeled “parody,” “humor” and not to market the “products” displayed
- This use gets 1st Amendment Protection
Remedies
The principle TM remedy is an injunction.
Πs are entitled to injunctions if they can prove infringement
Showing for TRO:
1. Π will suffer irreparable harm – if have right to permanent injunction is easier
2. Π has a likelihood of success on the merits
- this is harder to win on.
Π is entitled to damages for (1) Δ’s profits, (2) any damages sustained by the plaintiffs, (3) the
costs of the action.
- Π needs only to prove Δ’s sales, Δ must prove all other elements of costs.
- Court can enter judgment up to triple the actual damages
Lindy Pen v. Bic Pen
- Π makes sufficient claim that Δ infringed, but needs damages
- Π can recover for actual harm, if Π can prove lost sales, etc. – difficult to do
- Π can also recover Δ’s profits if infringement was deliberate or willful
- Π cannot make either claim, so wins suit, but no money
Big O Tire Dealers, Inc. v. Goodyear Tire
- Δ is forced to pay for corrective advertising necessary to repair damage to the Π’s TM
Internet TM Cases
Holiday Inn
- No infringement where Δ did not create customer confusion, only relied on the existing
confusion in similar phone numbers 1-800-HOLIDAY and 1-800-H0LIDAY
- Π may have had a better case under dilution, b/c no customer confusion.
Panavision
- Δ guilty of dilution by registering alternate domain names and trying to extort money
1999 Cybersquatting Act (§43(d)) provided for violation if one uses a TM with (i) a bad faith
intent to profit from that mark, AND registers the mark as a domain name that (I) is identical or
confusingly similar to distinctive TM OR (II) is identical, confusingly similar or dilutive to a
famous mark. (See factors on handout p. 769)
Sporty’s Farm
- Π asserted that Δ acted in bad faith by registering same domain name
o Court agreed, and forced Δ to give back the URL by injunction
- Court finds liability under the Cybersquatting Act, but no damages because there was
prior use
- No damages under dilution because the action was not willful
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Morrison & Foerster
- Δ loses under CyberAct, must transfer domain names
Harrods v. Sixty Internet Domain Names
- Π can bring suit against the domain names themselves, through in rem jurisdiction, even
though the owners of the property are unknown.
- Π fails to make claim b/c cannot show “bad faith” as statute requires
Hewlett Packard
- Δ acted in bad faith, by purchasing domain names
ASSOCIATED RIGHTS
False Advertising / Disparagement
“puffing” is still permitted, both at common law and under the statute.
- general assertions that a consumer will not rely on.
Common Law False Advertising
- Competitor can bring suit for a false statement about one’s own product, or about another
product, if they have an actual loss of consumers due to false advertising
- Requires that one party intends to divert trade from the competitor
Disparagement – injurious falsehoods in the commercial context
(1) publication, (2) Falsity, (3) Malice, (4) Lack of privilege (5)**special damages
FTC Deception, if “there is a representation, omission or practice that is likely to mislead the
consumer acting reasonably under the circumstances to the consumer’s detriment.”
Mosler Safe Co v. Ely-Norris
- Deceptive trade practices claim may require evidence of past customer confusion
- Even assuming a false claim, no showing that customers went to Δ instead of Π
Hurlbut v. Gulf Atlantic
- For common law disparagement claim, court requires showing of “pecuniary loss that has been
realized of liquidated as in the case of specific lost sales.”
K-Mart
- Π’s claim of disparagement stemming from patent action, fails because Δ acted in good faith
thinking that Π had infringed – so there was no Δ malice
Flotech v. duPont
-Δ’s comments were not disparagement, b/c (1) made in good faith, and (2) made to protect the
speaker’s product, Teflon, from dilution / product liability
Bose
- Consumer Reports did not act with malice in making their report, so not liable
- malice – complete departure from the standards of investigation and reporting
U.S. Healthcare
- There was defamation, and no 1st amendment Δ because commercial speech would not be
chilled
Dairy Stores
- No disparagement, because no showing of actual malice, which is needed if product is a matter
of public concern, which the bottled water was here.
§43(a) False Advertising Actions p.103
- Gives standing to any competitor in the industry w/o required showing of actual damages
Johnson & Johnson
- statute gives standing to any party who is in the product market
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- Π has standing, but must prove damages from Δ’s false statements to have a claim
Ortho v. Cosprophar
- Π must show that it competes with Δ’s product in the market, and Δ’s claims will lead to
customers leaving the Π’s product to go to Δ’s
Alpo
- Π can recover only actual damages (Π’s lost profits, cost of Π’s corrective advertising,
harm to Π’s goodwill not reflected by the harm), but not Δ’s profits
- To recover Δ’s profits, must show willfulness or bad faith
Mylanta v. Tums
- Court grants dismissal because the “net communicative effect” of Δ’s statements were
not misleading
- Δ did not show that public believed that aluminum leads to arthritis.
Consumer Remedies
Colligan v. Activities Club
- Consumer cannot sue under the Lanham Act
- Still only competitors and others w/ commercial interest in the false advertising
Jays Food
- IL statute does not give standing to consumers, because there is no consumer injury
o Some Consumer Protection Acts give more help to consumers
Doliner v. Brown
- No §93A cause of action for financier who takes over deal
- More likely tortuous interference w/ contract
Charles of the Ritz
- FTC says ad is erroneous, and Court agrees, forcing ad to stop
- There is no reasonable basis for the claim
Assignments p. 675-679
- “naked” assignments (in gross) of a TM are invalid
“A registered mark or a mark for which application to register has been filed shall be assignable
with the goodwill of the business in which the mark is used, or with that part of the goodwill of
the business connected with the use of and symbolized by the mark.”
- to protect consumer association b/w the mark and the product sold.
- An assignment does not automatically grant a right to sue for past infringement and to
collect damages
o New owner must be sure this right is granted expressly
- Rights of assignee are valid, if recorded, even against a subsequent bona fide purchaser
Licensing/ Franchising
- a licensor in bankruptcy can chose to reject all prior commitments / contracts
o this can create problems for the licensee
“Related Companies Doctrine” – is a company that interacts with a trademark owner in a way
that trademark owner asserts quality control over that mark
TM owner gets benefit of the related company using the mark under owner’s control
- this doctrine only applies to registered marks under the statute
- At common law, allowing other use of TM will result in owner losing TM rights
Unsupervised Licensing / Assignments
- Licensor of the TM must take “reasonable measures” to detect and prevent misleading use of
the mark by licensees, or risk cancellation of the registration.
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- The owner must take actual, not just “paper” control, on a consistent basis
- Owner must bring action against a non-complying licensee / assignee
Dawn Donut v. Hart’s Food
- Not enough supervision of mark by licensor– See below on licensing
Antitrust Problems
“Tying” is illegal, found if:
1. two distinct products
2. market power in mkt 1 used to control mkt 2
3. interstate commerce
better cases for TM owner of not tying:
1. give choice to licensee / franchisee by making specifications available on mkt
2. give some pre-approved suppliers other than self
3. Price TM highly and then keep the prices of the goods required low
4. Sell “experience” not just “hamburger”, etc.
Carvel
- No illegal “tying” because there was only one product – the mark was part of the ice
cream and service
Chicken Delight
Tying illegal, because TM and chicken is tied to other paper products
Jefferson Parish – court looked to the pre-contract market
Horizontal licensing contracts (b/w wholesalers or distributors themselves) are per se violations
of the antitrust laws – cannot divide up the market geographically
Vertical agreements (manufacturer, distributor, wholesaler, retailer) are generally ok
Solution: One wholesaler sue the other, then settle – is usually approved by the courts
- or give “primary responsibility” to one in a territory, but allow competition
Trademarks and Right of Publicity
Common law tort: right of publicity
1. distinctive mark
2. is widely known
3. is deliberately imitated
4. in order to sell a product
Federal Copyright law trumps the state Right of publicity claim if:
1. The federal law make clear that it occupies the entire field, OR
2. If the state law conflicts with the federal law
Bette Midler
- She wins on the common law right of publicity against Ford who imitated her voice
without her permission.
Design Patent
- design patents are tough to get, but still may be better protection than trade dress for a
product design
- Damages are more and easier w/ design patents
- Trade dress infringement, however, is easier to prove than a design patent infringement.