Trademark/ Service Mark Issues
For Public Power Utilities
APPA LEGAL SEMINAR
November 15, 2005
Brian E. Banner
Washington, D.C.
Bebanner@comcast.net
© Brian E. Banner 11/15/2005
Change is good.
We come to these types of meetings to learn about changes
in the law and the world around us. Your business changes,
your employees change and your challenges change.
Professionally, I have recently become a sole practitioner
for example. Someone once said, When you are through
changing, you are through.
We all must learn how to continue managing change in our
lives.
What is a mark?
Something that identifies and distinguishes goods or
services from one source from those manufactured
and sold by others. Unlike patents which expire 20
years after filing or copyrights which enter the
public domain after the life of the author plus 95
years service marks and trademarks can last forever
when properly used, registered and policed!
Are they valuable?
The Coca-Cola Company values its “CocaCola” brand at over $67 billion dollars for
purposes of accounting.[1]
[1]
Source: Intellectual Asset Management August/September 2005 page 5
& Interbrand/Business Week.
How are rights created?
Common law rights in marks are created through proper
use of the mark in commerce regulated by the U.S.
Congress under the commerce clause of the Constitution.
First in time is first in right when it comes to brands. They
are also created tentatively upon filing of an intent to use
application at the U.S. Patent and Trademark Office.
What can be a brand?
Almost anything that can indicate the source, origin or
sponsorship of your service or product.
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A Word (Nike)
A Logo
A Design
A Slogan (Just Do It)
A Smell (Plumeria yarns)
A Non Functional Package (Trade Dress)
A Building (the Pizza Hut)
A Personal Name (with permission)
A Sound (MGM Lion’s roar; NBC chimes)
A Color (pink for fiberglass insulation)
Service Mark:
Any word, name, symbol, design or combination thereof
used by a person or entity to distinguish or identify services
of one party to those of others in commerce. Advertising is
the way one uses a service mark. 15 USC Sec. 1127 notes
that the term "service mark" means 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 chapter, to identify and distinguish the
services of one person, including a unique service, from the
services of others and to indicate the source of the services,
even if that source is unknown.
Trademark
Any word, phase, symbol, design or combination thereof
used by a person or entity to distinguish or identify goods
of one party to those of others with the intent to use the
mark in commerce.
This type of mark appears on the product or its packaging
or in a display closely associated with the sale of the goods
most of the time.
Spectrum of Distinctiveness for
enforcement and registration
Fanciful/Coined
Arbitrary
Suggestive
Descriptive
(strongest)
Generic
(weakest)
Inherently Distinctive Marks
Fanciful or Coined Marks - a term with no independent
meaning: rather, coined for the sole purpose of
functioning as a trademark. “Google” for internet
searching.
An arbitrary mark, such as “Baby Ruth ” for candy bars,
uses ordinary words but in an arbitrary or fanciful
way. Such a mark is registrable and is usually
accorded a fairly broad scope of protection.
Inherently Distinctive Marks-A
Suggestive Marks - a term that suggests some
quality, feature or characteristic of the goods, but
requires imagination or thought to reach a conclusion
as to the nature of the goods.
Non-Inherently Distinctive
Descriptive Marks - marks which immediately describe
a purpose, function, characteristic or feature of the
goods. The mark “Chap-Stick” was merely descriptive
of a quality or characteristic of the product—it is a
“stick” for chapped lips. A descriptive term is usually
accorded a narrow scope of exclusivity and is therefore
often deemed initially to be a weak mark. Long and
exclusive use affords such marks what is known as
“acquired distinctiveness.” If a descriptive mark, either
when adopted or through use, is distinctive of the goods
or services it designates, it may be registered.
GENERAL ELECTRIC has become a famous mark
through acquired distinctiveness.
Generic Words
The name of the product or service itself…as in a
noun. “CAR” for an automobile. This word cannot,
by definition, function as a mark under any
circumstances. It can never indicate source, origin
or sponsorship. CUSTOM-BLENDED gasoline,
HONEY BROWN for ale, “french fries” and “danish
pastries” (geographical terms) are all generic for a
class of goods.
Use
Your exclusive right to use your mark depends mainly on two
things:
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How the service mark is used in your advertising;
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How the general public uses your service mark.
4 Use Rules
1.
2.
Use proper notice ® only when mark is federally
registered.
Use generic name of service after the mark.
3.
Present your mark so that it Stands
4.
Use your mark as an adjective (a word that asks, which,
how many or what kind of) and never as a noun.
Out.
Notice
•
The symbol ® should be used with your mark. For
example, The phrase “Registered in the U.S. Patent and
Trademark Office” or the abbreviation “Reg. U.S. Pat
and Tm. Off.” in small type in conjunction with the
service mark. 15 USC Sec. 1111.
Use generic name after mark
Mark should Stand Out
Which of the following service marks stand out in your mind?
Example 1
Example 2
Mark is an adjective
Correct:
Always used AARP® investment services.
Incorrect:
Please use AARP’s investment services.
Never use mark in plural or possessive form.
Registration advantages
• National constructive notice.
• Immediate District Court Jurisdiction. 15 USC Sec. 1121.
• Shield against federal registration of confusingly similar
marks by others.
• Insulates owner from subsequently filed state anti-dilution
actions.
Use Based Application §1(a)
• Common law rights must exist.
• Dates of first use of the mark must be given.
• Specimen of the mark as used in commerce must be filed
(label for trademark; brochure or advertising for service
mark).
Intent-to-Use Application
• Bona fide intent to use the mark in commerce creates
“constructive date of first use” as of filing of application.
• Subsequent filing of Statement of Use that includes dates
of first use and specimen of the mark as used.
• When the Statement of Use is accepted and the application
matures into a registration, it is enforceable from the filing
date and not the first use date.
Use
It is important to recognize that the key to service mark and
trademark rights is acutal use in trade.
The exclusive right to a service mark belongs to one who first
uses it in connection with a specified service. Such use need not
have gained wide public recognition, and even a single use in
trade may sustain service mark rights if followed by continuous
commercial utilization. Secret, undisclosed use on internal
documents are generally inadequate to support the denomination
'use‘ use of your mark no matter how much money and time you
have spent on the mark.
Use
Non-use (without good justification) for three consecutive
years can lead to abandonment of your mark.
15 USC Sec. 1127 says that a mark shall be deemed to be
"abandoned" if either of the following occurs:
(1) When its use has been discontinued with intent not to
resume such use. Intent not to resume may be inferred from
circumstances. Nonuse for 3 consecutive years shall be prima
facie evidence of abandonment. "Use" of a mark means the
bona fide use of such mark made in the ordinary course of
trade, and not made merely to reserve a right in a mark.
(2) When any course of conduct of the owner, including acts
of omission as well as commission, causes the mark to
become the generic name for the goods or services on or in
connection with which it is used or otherwise to lose its
significance as a mark. Purchaser motivation shall not be a
test for determining abandonment under this paragraph.
Common Law:
Limited rights on services or goods as they are applied to
the location where the mark is are used.
Under state unfair competition law and federal unfair
competition law one may protect one’s rights only in
a given area where one has “valid” prior use of a mark.
Use
Not all use is valid use, (i.e., ethical pharmaceutical drugs
require FDA approval and prescription; sales of machine that
use radiation such as X-ray equipment requires issuance of a
prior government permit; food products must be properly
labeled as to their ingredients, etc.
Priority of legal or constructive use is required for a valid and
enforceable federal registration.
Federal Registration
Federally registered marks may become unenforceable and
generic if they becomes the genus of the goods. ASPIRIN,
INTERNET, YO YO, ESCALATOR, & MONOPOLY are some
examples of federally registered marks which became
generic. Misuse by others if unchecked, or misuse by the
owner will often lead to a permanent loss of service mark or
trademark rights.
State Registrations
Rely on state registrations only when your service mark
can not be federally registered for some reason.
Understand that a federal registration will trump a state
registration when the owner of the federal registration
decides to expand into the particular state so proceeding
with a service mark may create good will a prior federal
registrant may be able to take away in the future.
Life is good but not always fair.
Policing Your Mark
• Routine policing by the owner is required to discharge its
duty to prevent consumer confusion.
• The amount of policing depends on industry standards and
common sense.
• A written policy on internal and external use of your mark
is good first step. See attachment to my paper for example.
• Employees and customers should help you to police your
marks.
What to look for?
Any mark that looks, sounds or has the same meaning as one of
your service marks within your industry.
Any actual marketplace confusion detected by your customers
or employees.
Any mark that creates a likelihood of confusion.
Infringement
Infringement arises when a new entry to the market uses a
service mark or trademark that is so close to your existing
service mark that consumers are likely to be confused as to
the source, origin or sponsorship of the new branded
services or goods. Actual confusion occurs when your
customer thinks you are related with some unrelated entity
(it need not be a direct competitor) who is using a
confusingly similar mark. If the two marks look alike,
sound alike or have the same meaning and, if the services
and/or goods are competitive or complementary then a
likelihood of confusion may arise.
Infringement
15 USC Sec. 1114 says in part:
(1) Any person who shall, without the consent of the registrant (a) use in commerce any reproduction, counterfeit, copy, or
colorable imitation of a registered mark in connection with the
sale, offering for sale, distribution, or advertising of any
goods or services on or in connection with which such use is
likely to cause confusion, or to cause mistake, or to deceive;
shall be liable in a civil action by the registrant for the
remedies hereinafter provided.
Infringement
Example:
“JOSE GASPAR GOLD” for tequila was held to be
confusingly similar to the registered mark “GASPAR’S
ALE” last year. Similar channels of trade and “GASPAR”
held to be the memorable part of each mark therefore
confusion was likely. Registration denied. Owner of
tequila mark wisely adopted another brand to avoid an
injunction and damages.
Dilution
• Two types
• Federal Dilution under Section 43(c) of the Trademark Act.
• State Anti-Dilution Statutes in about 30 different states.
Dilution (continued)
Federal Trademark Dilution Act was enacted in 1996 to
provide a remedy for the dilution of “famous” marks only.
Federal “dilution” means the lessening of the capacity of a
famous mark to identify and distinguish goods or services,
regardless of the presence or absence of:
(1) competition between the owner of the famous mark and
other parties, or
(2) likelihood of confusion, mistake, or deception.
In 2003 the Supreme Court said that evidence of “actual
dilution” was required to be shown under this statute.
Moseley v. V Secret Catalogue, 537 U.S. 418 (2003)
Dilution (continued)
State Anti-Dilution statutes are generally broader and looser
that the federal law. For example, the New York law reads:
“Likelihood of injury to business reputation or of dilution of the
distinctive quality of the mark or trade name shall be a ground for
injunctive relief in cases of infringement of a mark registered or not
registered or in cases of unfair competition, notwithstanding the
absence of competition between the parties or the absence of confusion
as to the source of goods or services.”
Differences
Under federal law only a “famous” mark is protected from
subsequently use marks that actually dilute the
distinctiveness of the mark but under state law “fame” is
not a factor. Additionally, under state law evidence of
actual dilution is not required.
Trademark Searches & Opinions
To avoid marketplace confusion and to detect other similar
brands for the same or similar goods or services before
proceeding it is advisable to conduct a full availability
search. It will allow your company to make an informed
decision on whether or not to adopt, use and register a new
service mark in light of the risks that are objectively
identify by the contents of the search report. Various
commercial entities provide very reliable full search report
for relatively modest costs. By conducting a search and
obtaining a written opinion you evidence your effort to act
commercially responsibly in adopting a new service mark.
The act removed future claims of recklessness and/or
willfulness in the selection of a new mark should someone
allege infringement.
Questions
There are no dumb questions. Answers are another thing.
Please understand that each case must be interpreted on its
own unique facts and the goal has to be arrived at based
thereon. Thank you for your attention.
My new contact information: Bebanner@comcast.net
© Brian E. Banner, 11/15/2005