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
"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
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
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?