Trademarks
A trademark is an IP right used to protect words, logos, and symbols that identify a product or service. Businesses spend a lot of money developing their trademarks. A trademark is used to distinguish between different products. A mark used to identify services is called a servicemark.
NOTE
The USPTO says the oldest U.S. trademark still in use was registered in 1884. The design is the word SAMSON with a picture of a man wrestling a lion. Samson Rope Technologies uses the trademark on its products. You can see the trademark at www.samsonrope.com.
The laws for trademarks and servicemarks are the same. Trademarks and servicemarks are collectively called trademarks in many texts, including this one. Even the USPTO uses the term trademark to describe both types of marks.
Trademarks represent a business’s commercial identity. Some marks are well recognized by the public. For example, the distinctive red bull’s-eye design of the Target Corporation identifies a retail department store. The bull’s-eye design is its registered trademark. The New York Times Company has used the trademarked slogan “All the news that’s fit to print” since 1896. It registered the slogan in 1958. The slogan still appears on the front page of The New York Times today.
How Should an Invention or Process Be Protected?
A person or business has to weigh many factors when considering whether to protect an invention through a patent or as a trade secret. They include:
- Whether the invention currently protected by trade secret is patentable. If it is, the person must review whether a patent provides better IP protection.
- What processes and controls can be used to make sure that only a limited number of people know about the invention. A person must make sure that everyone knows that an invention protected as a trade secret must be kept extremely confidential.
- How long the person wishes to protect the invention and the type of protection required.
What Is the Invention?
Trade secrets can be used to protect almost everything. One of the best-known examples of a trade secret is the Coca-Cola secret formula. The Coca-Cola Company even has an exhibit in its company museum about how it protects its trade-secret formula. Trade secrets also can be used to protect special ways to manufacture products or a process for conducting business.
Patents are limited to protecting only certain types of inventions or discoveries. To be patentable, an invention or discovery must meet all patentability requirements. If an inventor fails to meet any one of the requirements, then the USPTO can deny the patent application.
Advantage goes to: Trade secrets. Trade secrets can protect more types of inventions and discoveries.
How Must the Invention Be Protected?
The owner of a patent has the exclusive right to use the invention or discovery that is patented. That means that the owner can stop anyone else from using it. It is a violation of a patent to reverse engineer a product and recreate it. Only the patent owner can make the patented product.
Under trade secret law, it is not a violation to reverse engineer a product. This means that a person can analyze products to try to determine their secrets. For instance, chemists have tried to figure out the Coca-Cola secret formula. So long as a person lawfully obtains the product, analyzing it to figure out its trade secrets is legal.
Advantage goes to: Patents. Patents give greater protection against use than trade secrets.
How Long Must the Invention Be Protected?
A patent’s exclusive protection lasts only for the period of the patent. In most instances, this is 20 years. During this time, the inventor has the sole right to make, use, or sell the product. After the patented period is up, anyone may make the underlying product.
Trade secret protection can last forever, as long as the trade secret is kept confidential. For example, the Coca-Cola formula has been kept secret for over 134 years. Businesses implement many different types of policies to keep trade secrets confidential. For example, they use access-control mechanisms in computer systems. They limit physical access based on need-to-know principles. They may even use separation-of-duty principles to make sure that no one person knows an entire trade secret.
Advantage goes to: Trade secrets. Trade secrets can be protected longer.
If a company patents a process, invention, or method, it may lose trade secret rights in it. Patent applications are made available to the public 18 months after they are filed. The only exception to this rule is if the inventor states that he or she is not filing for a patent abroad. The USPTO makes patent information available when a patent is issued. Once information is made available to the public, it no longer can be protected as a trade secret.
Trademarks encourage brand loyalty. They also make it easy for customers to recognize products made by a particular manufacturer. They represent goodwill. Goodwill is the image and reputation a business has with its customers. Entities protect their trademarks from misuse because they want to protect their business and reputation.
Both federal and state laws govern trademarks. Federal trademark protection is the most well-known. The federal government regulates trademark registration under the Commerce Clause powers granted by the U.S. Constitution. Congress enacted the first trademark law in the late 1800s. Today, the main federal law protecting trademarks is the Lanham Act (1946).20 The Lanham Act allows for federal registration of trademarks. It also defines how trademarks can be protected. This chapter discusses federal trademark protection.
NOTE
The Lanham Act also is known as the Trademark Act of 1946.
Trademark Basics
Trademark protection rights belong to the first person who uses the trademark in commerce. This is different from patent and copyright laws, which award rights to the inventor or author. The first person or business to use the trademark in commerce will have certain common law rights to use the trademark. This is true under common law and state and federal trademark statutes. Entities that use trademarks in U.S. interstate commerce often register them with the USPTO. Entities that use trademarks only in one state may choose to register only in that particular state.
The rise in internet e-commerce may mean that more businesses will pursue federal registration for their trademarks. This is because business conducted over the internet cannot really be limited to customers of only one state. If an entity wants to conduct business over the internet, it may want to register its trademarks with the federal government. Over 640,000 trademark applications were filed with the USPTO in 2019.21
There are several benefits to federally registering a trademark. They are:
- Notice of the date of first use—The filing date of the registration application gives the public notice about the use of the trademark. It establishes a priority date for determining who was the first person or company to use a particular trademark. It establishes evidence of ownership of the trademark.
- Right to sue in federal court—A person or entity who registers a trademark with the USPTO has the right to sue infringers in federal court. They also have the right to recover damages and costs associated with an infringement lawsuit. In some cases, they may be able to recover attorney’s fees.22
- Limited ways to challenge the trademark—After 5 years of registration, a trademark can be contested only in limited ways. There are very few exceptions to this rule.23
- Right to use the federal registration symbol—Only a federally registered trademark can use the federal registration symbol.24 The symbol is an uppercase R in an enclosed circle or®. A person violates federal law if he or she uses this symbol on a trademark that is not federally registered.
A person must meet two basic requirements to register a trademark with the USPTO. They are:
- Use of the trademark in interstate commerce
- Distinctiveness of the trademark
Use in Commerce
First, the trademark must be used in interstate commerce.25 A person uses a trademark in interstate commerce when it is placed on goods or services and sold to the public in several different states. The registration application must state when the trademark was first used in commerce.
NOTE
Trademarks that are not federally registered often carry the raised “TM” symbol, or ™, to show that a person or business claims the underlying trademark as its own. Trademarks registered under state laws may use this notation.
A person may still register the trademark even if it is not used in interstate commerce at the time that the registration is filed. In this case, the person registering the trademark must show good faith intent to use the trademark in commerce in the future. “Good faith” means that a person honestly intends to use the trademark in interstate commerce.
Under the law, the person must begin using the trademark within 6 months after the USPTO approves it. The USPTO can extend this period up to 2.5 years.26 A person must notify the USPTO once it begins to use the trademark. At this point, the USPTO will issue the trademark registration.
Distinctive
The second basic requirement is that a trademark must be distinctive.27 Almost anything used by a person to distinguish his or her goods and services from another person’s goods and services can be a trademark. Words, numbers, logos, and pictures can all serve as trademarks.
NOTE
The federal government can regulate interstate commerce only under its Commerce Clause authority. That is why a trademark must be used in interstate commerce to be federally registered. A trademark that is used only in one state can be registered under the state’s trademark law.
The USPTO has two methods of registering trademarks. They are the “Principal Register” and the “Supplemental Register.” Strong trademarks, which are registered right away on the “Principal Register,” are inherently distinctive. This is a term of art in trademark law. Registration on the “Principal Register” is the main way of registering trademarks. It gives a trademark owner the greatest amount of rights under federal law.
NOTE
The trademark distinctiveness requirement is similar to the patent novelty requirement.
Weaker trademarks can be registered on the “Supplemental Register.” These trademarks meet all of the registration requirements except that they are not inherently distinctive. The only federal right granted by registering on the “Supplemental Register” is that the trademark owner may sue in federal court for trademark infringement. After 5 years of using the trademark, the owner may submit proof of trademark use and evidence that it has achieved secondary meaning. The USPTO will then move the trademark from the “Supplemental Register” to the “Principal Register.”
Trademark Registration
An applicant must submit a trademark registration application to the USPTO to register a trademark. In July 2020, it was taking the USPTO about 10 months to review trademark applications.28 The USPTO encourages trademark applications to be filed electronically as the USPTO processes electronic applications faster than paper applications. To encourage electronic applications, the USPTO makes paper application forms available only by special request over the telephone.
A trademark application must contain the following:
- Name and contact information for the owner of the trademark
- A drawing of the trademark
- A technical listing of the goods or services that the trademark represents
- Filing fee
NOTE
You can learn more about the USPTO’s Trademark Electronic Application System (TEAS) at http://www.uspto.gov/trademarks/teas/index.jsp.
After the application is filed, it is forwarded to an examiner who reviews the application to determine whether it is complete. The examiner also reviews proof that the trademark is used in commerce. The examiner reviews the trademark to make sure that it is inherently distinctive. Finally, the examiner reviews other trademarks to search for conflicts.
An examiner can reject a trademark for several reasons.29 They include:
- The proposed trademark is a generic name for goods or services.
- The proposed trademark is descriptive of the applicant’s goods or services and there is no secondary meaning.
- The proposed trademark is similar to another trademark already registered, and use of it on the applicant’s goods or services is likely to cause customer confusion.
- The proposed trademark contains immoral, deceptive, or scandalous matter.
- The proposed trademark may disparage or falsely suggest a connection with persons (living or dead), institutions, beliefs, or national symbols.
When the USPTO approves a trademark, it publishes the trademark in the Official Gazette, the USPTO’s official publication. The Official Gazette, which is published every week, includes a listing for trademarks and a listing for patents.
NOTE
You can see entries in the Official Gazette online at https://www.uspto.gov/learning-and-resources/official-gazette.
The Official Gazette gives the public notice of new trademarks. Once the trademark is published, any party who has concerns about the trademark may contest it. These parties have 30 days from the date of publication in the Official Gazette to file an “opposition” to the registration.30 An “opposition” is a proceeding before the Trademark Trial and Appeal Board that hears trademark disputes.
If no one opposes the trademark, the USPTO issues a Certificate of Registration for it, if it is already used in interstate commerce. If the person registering the trademark has not used it in commerce, he or she must begin using it within 6 months after the USPTO approves it. A person must notify the USPTO once he or she begins to use the trademark. The USPTO will then register the trademark.
Strong Versus Weak Trademarks
The USPTO “Principal Register” is for trademarks that are “inherently distinctive.” These are strong trademarks. Traditionally, trademarks are inherently distinctive if they do more than describe a good or service. Trademarks that are unrelated to a good or service and are fanciful, arbitrary, or suggestive are considered strong trademarks.
The USPTO’s oldest registered trademark is a good example of a strong trademark. That trademark is the name SAMSON with a picture of a man wrestling a lion. It has nothing to do with the company’s product, which is rope. However, it is a strong trademark because it is inherently distinctive. Customers who see the trademark will immediately associate it with the Samson Rope Corporation.
One of the best examples of an inherently distinctive trademark is the Apple Corporation’s rainbow-colored apple, which is their registered trademark. The trademark is inherently distinctive because it has nothing at all to do with the company’s product. When customers see the rainbow-colored apple with a bite taken out of it, they immediately think of Apple computers. This trademark would not have been inherently distinctive if an apple grower or a grocery store used it.
Weak trademarks are not inherently distinctive. The most common type of weak trademark is a descriptive trademark. A trademark is descriptive when it describes the underlying product that it represents.
Descriptive trademarks get protection when they achieve “secondary meaning,” or when the public associates the trademark with a particular good or service. Once a person can show that a trademark has a secondary meaning, it is entitled to full trademark protection.
For example, the trademark Kellogg’s Raisin Bran is a descriptive trademark that describes a kind of breakfast cereal. This registered trademark of the Kellogg Company has achieved secondary meaning as a particular type of cereal. The trademark Carpetland, USA for a flooring store is also descriptive. This registered trademark of the Carpetland, USA Corporation also has acquired secondary meaning as a particular type of flooring store.
If the USPTO determines that a trademark is descriptive and it has not yet achieved secondary meaning, that trademark is listed on the “Supplemental Register.” The only federal right granted by registering on the “Supplemental Register” is that the trademark owner may sue in federal court for trademark infringement. After 5 years of using a trademark, the owner can submit paperwork to move the trademark from the “Supplemental Register” to the “Principal Register.”
Some types of trademarks can never be registered. For example, generic trademarks cannot be registered. They are not eligible because they describe a class of products and are not unique. For example, the word butter cannot be trademarked because it describes a class of dairy products.
The registration period for a trademark is 10 years for newly registered trademarks. Between the fifth and sixth year after a person first registers a trademark, he or she must submit an “Affidavit of Use.”31 This document shows that the person or business is still using the trademark. After that, the Affidavit of Use must be filed again right before the end of the 10-year registration period. The person or business also must pay a maintenance fee. A person or business must re-register the trademark every 10 years to maintain protection of the mark.32
NOTE
An affidavit is a written statement a person signs, swearing that the content in the affidavit is true. The person signs the affidavit in front of a notary public or other official allowed by law to administer oaths and witness signatures.
Infringement and Remedies
Trademark infringement is a violation of a person’s trademark rights. A trademark owner has the right to use the trademark in commerce in association with certain goods and services. This protection begins as soon as the owner starts using the trademark in commerce. If a trademark is registered under either federal or state law, then the owner of the trademark has certain other rights as well. Federal and state governments do not enforce trademarks. Instead, owners must enforce their own rights and sue people who violate their trademarks.
FYI
Although this section discusses federal law, you should remember that many of these same types of trademark infringement actions also could be pursued in state court. Trademark owners may have additional types of tort actions that they can pursue in state court.
There are two main types of trademark infringement cases:
- Use of a similar trademark that is confusing or deceptive to the customer33
- Use of a similar trademark that dilutes the value of a famous trademark34
In the first type of case, a trademark owner can sue another person who uses a similar trademark in a way that is “likely to cause confusion, or to cause mistake, or to deceive.”35 The owner can bring this infringement action for innocent infringement and for willful infringement. The plaintiff, who is the trademark owner, has the burden of proof. The plaintiff must prove the following elements:
- The plaintiff owns a valid trademark.
- The defendant used a similar trademark in commerce.
- The defendant’s use of a similar trademark is likely to confuse consumers.
NOTE
Examples of famous trademarks include the Apple Computer, Coca-Cola, and Kleenex trademarks. They are all registered and used extensively across the United States. Most people recognize these trademarks and the associated brand of products.
If a trademark owner has registered his or her trademark with the USPTO, that registration is proof of ownership of the trademark. A plaintiff can use the defendant’s own advertising materials to show that the defendant used the trademark in commerce. A plaintiff also can use these materials to show that the defendant’s use of the trademark was confusing in some way. The confusion created could exploit the plaintiff’s goodwill in his or her trademarks and products. That is, the defendant is using a similar trademark in the hopes of selling more products because of the plaintiff’s good commercial reputation.
In reviewing whether a trademark is confusing, courts will compare the plaintiff’s and defendants’ trademarks. They will look at how similar the marks are. They will also look at the similarities between the goods and services that each trademark represents. They might also look at the defendant’s intent in using a similar trademark. If the court finds the defendant’s use of the trademark confusing, it can order the defendant to stop using the trademark.
The second type of trademark infringement case is for trademark dilution. This type of infringement case specifically applies to “famous” trademarks, or ones that are very well-known. Only holders of famous trademarks can file a lawsuit for trademark dilution.
In a dilution case, the trademark owner can sue for any use of a similar trademark that dilutes or tarnishes his or her trademark. Dilution occurs when a trademark is used to promote different goods. An example would be a Coca-Cola minivan or a Kleenex motorcycle. Customers would not be confused by the different use of the famous trademark. However, the value of the famous trademark is diluted when it is used with dissimilar products.
The trademark owner also has a dilution case if the use of a similar trademark tarnishes a famous trademark. A trademark is tarnished when it is used in an unflattering light. For example, in 1996 the children’s toy store, Toys “R” Us, sued an adult website with the domain name “adultsrus.” The court held that the defendant’s use of “adultsrus” to sell adult products diluted the “family” image and goodwill that Toys “R” Us had built in its products. The court ordered the defendants to stop using the “adultsrus” name.36
Remedies in an infringement case include injunctive relief and damages. Trademark owners want the court to stop infringers from using their trademarks in a confusing or diluting way.37 Trademark owners also may be able to get damages for the defendant’s profits in using the trademark, their own damages, and costs of the litigation.38
Relationship of Trademarks on Domain Names
The rise of e-commerce has created some interesting questions about trademark use. Today, people take it almost as a given that www.coca-cola.com will take you to the Coca-Cola Company’s website. Their domain name serves as their internet business address. Many companies try to use their business name or trademark as their domain name.
NOTE
At the end of 2019, there were over 362 million top-level domain name registrations.40
A domain name includes a top-level domain, represented by the .com, .net, or .gov at the end of the domain name. The second level is the information that comes directly to the left of .com, .net, or .gov. This is usually the place where a business or entity might want to use its name or trademark. To do this, the entity must register its domain name.
A domain name is different from a uniform resource locator (URL). The domain name is only part of a URL. The complete URL is the actual internet address. A URL goes into much more detail than a domain name, providing much more information, including the specific page address, folder name, machine name, and protocol language, such as http://.
Companies register their domain names and create websites to advertise and sell their products. They want their domain name to be recognizable to their customers. The first company to register a domain name has the right to use that name. Domain name registrars do not review a domain name to make sure that it does not infringe on a trademark. If a domain name is available for use, then they will accept registration for that name.
In the mid to late 1990s, domain names were registered at a fast pace, and not all of these registrations were legitimate. Cybersquatting is the bad-faith registration of a domain name that is a registered trademark or trade name of another entity. A trade name is the business name of an organization. Cybersquatters tried to register these names before the legitimate owners of the trademark or trade name. They also registered domain names based on these famous trademarks or trade names but used a common misspelling of those names.
Registering a Domain Name
A domain name is the common name after www that people use to refer to their websites. People register these names to grow their businesses and help others find their businesses on the internet. Domain names are simply internet addresses.
Domain names must be registered with the Internet Corporation for Assigned Names and Numbers (ICANN), which coordinates the internet’s naming system. You cannot directly register a domain name with ICANN. Instead, you must register it with a domain name registrar. ICANN authorizes these registrars to accept domain name registrations and creates policies for how these registrations should be handled.
ICANN and domain name registrars do not review whether a new domain name registration infringes upon a business or entity’s trademark. Instead, they accept registrations for domain names on a first-come, first-served basis. Trademark laws and ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP) are used to resolve domain name disputes regarding trademarks. You can view ICANN’s dispute resolution materials at https://www.icann.org/resources/pages/help/dndr/udrp-en.
A cybersquatter registers trademarks or trade names to profit off of the other person’s trademark or trade name. They also register them in the hopes of selling the domain name to the trademark owner for large amounts of money, or to attract customers who were looking for a specific product or business. The cybersquatter then redirects the customer to other websites.
NOTE
Bad faith means a malicious or harmful motive for taking a certain action.
Trademark owners have a legal right to protect their trademark, which includes protecting their trademarks from cybersquatters. Many people, businesses, and organizations were harmed by cybersquatters because they had to pay large amounts of money to get ownership of their trademarks. They sued cybersquatters to stop them from engaging in trademark infringement, which was a time-consuming and expensive process.
NOTE
The WIPO is an arbitrator under the UDRP. The WIPO reported a record number of domain name cases in 2019.42
Congress created the Anti-Cybersquatting Consumer Protection Act (ACPA) in 1999.41 It was designed to stop people from registering domain names that were the trademarks of other entities and allows entities to sue others for cybersquatting. To prove their case, the plaintiff must show that the cybersquatter registered the trademark in bad faith with the intent to profit from the registration. Under the law, a plaintiff can recover damages and ask the court to issue an injunction that stops the cybersquatter from using the contested domain name. Courts also can award the contested domain name to the winning party.
Trademark owners also can pursue a domain name dispute under the ICANN UDRP. This process may be faster than pursuing an action under the ACPA. Under the UDRP, a contested domain name may be disconnected or transferred to a winning plaintiff.