Course No.: 9200 710 801
Course ID:  17261
Tu 6:30-9:30 p.m.
Room W-215
Professor Jay Dratler, Jr.
Room 231D (IP Alcove)
(330) 972-7972
Copyright © 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2008   Jay Dratler, Jr.  
For permission, see CMI.

Notes and Questions: A Primer on Trademark and Unfair-Competition Law

1.  Rights based upon use.  Traditionally, at common law and under the early federal statutes, rights in trademarks were based upon their use.  The rule was simple: first in time, first in right.  In the absence of modern methods of transportation and communication, however, rights based upon use were limited to the geographic area of use.  In a famous passage from a pre-Erie decision, the Supreme Court explained why:
    "The asser[tion that trademark rights have no geographic limits] is based upon the fundamental error of supposing that a trade-mark right is a right in gross or at large, like a statutory copyright or a patent for an invention, to either of which, in truth, it has little or no analogy. . . .  There is no such thing as property in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is employed.  The law of trade-marks is but a part of the broader law of unfair competition; 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; and it is not the subject of property except in connection with an existing business."

United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97, 100, 39 S.Ct. 48, 63 L.Ed. 141 (1918).

2.  Rights based upon registration. Until 1988, the federal statute operated on the same principle: that rights in trademarks are based upon use.  It therefore permitted marks to be registered only after use in connection with the sale of goods or services.  This basis of registration survives in the statute today in Lanham Act § 1(a), 15 U.S.C. § 1051(a).

Allowing registration on the basis of use only, however, had two flaws.  First, firms often spent a great deal of money preparing to use a mark, in such things as name research, focus-group research, planning, and advertising.  If someone else could obtain prior rights by using the mark first, the investment and effort in planning would be lost.  Second, foreigners complained that a system based entirely on use allowed American firms to pirate marks known abroad by being the first to use them in the United States.  To avoid these problems, Congress adopted the Trademark Law Revision Act of 1988, which added Section 1(b), allowing marks to be registered based upon a bona fide intent to use them, as distinguished from their actual use.  See Lanham Act § 1(b), 15 U.S.C. § 1051(b).

Even in intent-to-use registrations, however, use is still a factor.   The applicant for registration must use the mark in commerce and file a statement of use before registration will issue.  See Lanham Act § 1(d), 15 U.S.C. § 1051(d).  How long does the applicant have to use the mark and file this statement?

As long as registration eventually issues, however, the filing of the application provides nationwide rights of "constructive use."  See Lanham Act § 7(c), 15 U.S.C. § 1057(c).  To what exceptions is this nationwide "constructive use" subject?  Are they reasonable?

Although the applicant's rights to injunctive relief in the interim period between application and registration are still uncertain, the rule of constructive use is supposed to prevent interlopers from devaluing the applicant's preliminary investment in a mark.  As a result, rights in marks for which an "intent to use" application is filed under federal law are based on use, applications for registration, and registrations in a rather complex way.

3.  "Trademarkable" subject matter. Use, applications for registration, and registrations determine who has rights, but what kinds of things does the law protect as "trademarks"?  Look at the definition of "trademark" in Lanham Act § 45, 15 U.S.C. § 1127.  (There is a similar definition of "service mark," which means a mark used with services, rather than goods.  That definition is omitted for the sake of brevity; it is identical except insofar as the subject matter—goods rather than services—requires otherwise.)  Look also at the list of things which may not be federal trademarks under Lanham Act § 2, 15 U.S.C. § 1052.  Is the range of things that may be a federal trademark broad or narrow?  In particular, could you register the following as trademarks, assuming they meet the requirements of distinctiveness discussed below?

    a.  A cartoon image of a donkey
    b.  An animated image of the same donkey, running through a field
    c.  A drawing of two people engaged in sexual intercourse
    d.  Sounds, such as the aural "logo" of the National Broadcasting Network: "N," "B", "C", or the theme from the Jack Webb television series, "dum da dum dum"
    e.  An aroma, for example, a strawberry odor used with yarn
    f.  The shape of a faucet
    g.  An off-green color for commercially-used ironing boards
    h.  A three dimensional logo, such as five tennis balls arranged to look like an atomic nucleus
    i.  An Internet domain name like "acme.com"
    j.  A picture of Pat Nixon, the late president's widow

4.  Distinctiveness.  In addition to being proper subject matter, in order to be registrable (or protected, even at common law) a trademark must be distinctive.  There are four "hues" or categories in the "distinctiveness spectrum" for trademarks: arbitrary/fanciful, suggestive, descriptive, and generic.  See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992).   Marks are arbitrary if they have no relationship to the product or service with which they are used.  An example is "Black and White" for scotch whiskey.  Marks are fanciful if they are coined or made-up terms, such as "Kleenex."  Both arbitrary and fanciful marks are highly distinctive and merit protection and registration.

Less distinctive, but still able to be registered and protected are suggestive marks.  They suggest the nature or quality of the goods or services but require some imagination or thought to guess it.  An example is "Playboy" for a men's magazine.

In contrast, descriptive marks, such as "Breakfast Bar" for a fast-food restaurant serving breakfast, directly reveal the nature, quality, characteristics, or ingredients of the goods or services, in way intelligible without the exercise of thought or imagination.  In order to be registered or protected at common law, descriptive marks must be shown to have acquired distinctiveness through consumer recognition.  See Lanham Act § 2(d), (f), 15 U.S.C. § 1052(e), (f).  (This acquired distinctiveness is called "secondary meaning," another common term of art that the Lanham Act does not use.)

Finally, generic marks (such as "Thermos" for a vacuum-insulated bottle, or "Escalator" for a moving staircase) constitute the commonly used descriptive name for a good or service.  They cannot be protected or registered as trademarks, even upon an alleged showing of secondary meaning, because to allow their exclusive use would to prevent competitors from calling products by their names.

A mark's place in the distinctiveness spectrum, and therefore its strength, depends entirely upon context.  Not only does it depend upon the goods or services with which the mark used; it also depends on how consumers identify those goods or services.  For example, a perfectly good (arbitrary or fanciful) trademark may become generic and lose protection if the public begins to use it as the name of a product or service, rather than as a brand.  See, e.g., King-Seeley Thermos Co. v. Aladdin Industries, Inc., 321 F.2d 577, 579 (2d Cir. 1963) ("Thermos"); Haughton Elevator Co. v. Seeberger, 85 U.S.P.Q. (BNA) 80, 81 (Comm'r Pat. 1950) ("Escalator").

Can you place each of the following marks in the distinctiveness spectrum?

Mark Used for
a.  Chap-Stick Lip balm preparation in a stick
b.  Q-Tips Cotton swabs on small sticks
c.  Coppertone
Sun tan oil
d.  Beef & Brew Restaurant services
e.  7-Eleven
Convenience store services
f.  Charlie
Perfume for women
g.  Surgicenter Outpatient surgical services
h.  Bufferin Buffered aspirin
i.  Lite Light (low calorie) beer
j.  Vision Center Optical clinic
k.  Old Crow Whiskey
l.  Xerox Copying machines
m.  Chicken of the Sea Canned tuna
n.  Opry Country music concert services
o.  Roach Motel Cockroach trap
p.  Micro Balancing weights for car wheels
q.  Maternally yours Maternity clothing store services
r.  Chocolate Fudge Diet soda with chocolate fudge flavor
s.  Raisin Bran Breakfast cereal with raisins and bran
t.  Clorox Household bleach


5.  Unregistered trademarks and "trade dress." Because of the many advantages that federal registration provides, it is advisable for any mark that the owner is seriously interested in using commercially.  Registration, however, is not required for federal protection.  It is now well established that Lanham Act § 43(a), 15 U.S.C. § 1123(a), provides a general federal codification of the law of unfair competition and protects both unregistered marks and so-called "trade dress."  See, e.g., TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 121 S.Ct. 1255, 1259, 149 L.Ed.2d 164, 58 U.S.P.Q.2d (BNA) 1001 (2001); Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 112 S.Ct. 2753, 120 L.Ed.2d 615 (1992).  "Trade dress" may include product packaging, the shape or design of products, sales techniques used with products or services, and the decor of restaurants or other service establishments.

Like verbal marks, trade dress can be distinctive—and therefore protected and even registered as a trademark—without a showing of acquired distinctiveness or "secondary meaning."  See Two Pesos, supra, 505 U.S. at 776.  However, not all trade dress follows this rule; trade dress consisting of a product's design or shape cannot be distinctive—and therefore cannot be protected or registered as a trademark—unless it has secondary meaning.  See Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 216, 120 S.Ct. 1339, 146 L.Ed.2d 182, 54 U.S.P.Q.2d (BNA) 1065 (2000).

6.  Functionality.  There is one additional requirement for a mark to be protected and registrable: it must not be "functional."  See Lanham Act §§ 14(3), 33(b)(8), 43(a)(3), 15 U.S.C. §§ 1064(3), 1115(b)(8), 1125(a)(3).  This means that the thing asserted to serve as a mark cannot serve a utilitarian or functional purpose.  The purpose of this requirement is to preserve the integrity of patents by making sure that functional features which should be protected, if at all, by patents, are not protected by trademark principles instead.  See TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 121 S.Ct. 1255, 1259-1260, 149 L.Ed.2d 164, 58 U.S.P.Q.2d (BNA) 1001 (2001).  Could a bright orange color, used with plastic rain gear for emergency workers, be protected as a trademark or trade dress consistently with these principles?

7.  Likelihood of Confusion.  If a trade symbol (mark or trade dress) is protectable (proper subject matter, distinctive, and not functional), the owner (by virtue of prior use or registration) can protect it against infringement or unfair competition.  See Lanham Act § 32(1), 43(a), 15 U.S.C. § 1114(1), 1125(a).   But what constitutes infringement or unfair competition?  In this context, both concepts boil down to the same thing: whether the defendant's use of a similar symbol is likely to cause confusion.  What specific words in each relevant section of the statute (Lanham Act §§ 32 and 43(a)) invoke this standard?

Not only is the "likelihood of confusion" standard the universal standard for trademark infringement and trademark-related unfair competition under federal law, it is also the universal standard for the same offenses under state law.  See 2 Jay Dratler, Jr., Intellectual Property Law: Commercial, Creative, and Industrial Property § 10.01 (introduction) (Law Journal Press, 1991).  The universal approach to applying the standard is also the same: courts apply a multifactor test that is designed to reflect commercial reality, i.e., that is designed to assess the likelihood of confusion among purchasers and others in the real world.  See id., § 10.01[3].  The difficulty is that each court has a different list of factors, and some courts apply them differently than others.  As a result, the lawyer has to consider binding precedent from the governing jurisdiction.  In broad outline, however, the multifactor tests are all generally the same, for they are all designed to reflect a realistic commercial risk of confusion that implicates trademark policy.

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