The following pages offer information about trademarks and trademark law.

• What is a trademark
• Types of marks recognized for Federal protection
• How to protect a trademark
• What are the consequences of using someone else's trademark
• What remedies can a trademark owner get against an infringer
• The new Federal Trademark Dilution Act of 1995
• Are domain names trademarks

Basic Definitions

A trademark is a word, phrase, symbol or design, or the combination of words, phrases, symbols or designs, used to identify and distinguish the goods or services of one party from those of others.

Article 15, paragraph one of the GATT's Trade Related Intellectual Property Rights Agreement defines a trademark as "any sign or combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings."

A service mark is similar to a trademark but it is used to identify and distinguish service of one person from another.

Distinctiveness

In order for a word, symbol or device to function as a trademark it must be distinctive. A mark is distinctive if it is capable of identifying one party's goods or services from another.

Categories of Marks Based on Distinctiveness

Some marks are inherently distinctive, while others only become distinctive over time. A mark which is not inherently but becomes distinctive has achieved "secondary meaning." Generally, courts classify marks into four broad categories, based upon degree of distinctiveness and protectability:

• Generic Marks are words which define the type of product or services. A mark can be generic at the time of adoption or become generic through usage. A generic mark cannot receive trademark protection. Examples of generic marks are "milk", "banana", "cereal", and "beer." Some marks have become generic over time because consumers associate the mark with the type of product rather than source of origin. Marks that became generic include "aspirin" and "zipper."
• Descriptive marks are marks that are not protectable upon first use. Instead, they only become protectable when they acquired "secondary meaning" through continued usage. A mark has acquired secondary meaning if consumers come to associate or recognize that the mark designates a particular single source or producer of the product. Although a consumer must mentally associate the mark and a single source, it is not necessary for a consumer to know the producer's corporate name. Surnames and geographic terms are considered descriptive marks.
• Suggestive Marks require imagination by the consumer to discern what is the nature of the product. Conversely, a descriptive mark conveys an immediate idea of the qualities or characteristics of the product. Because suggestive marks are considered inherently distinctive, they are protectable from the time of first use.
• Arbitrary, fanciful, and coined marks — the strongest category.

The Lanham Act recognizes four types of "marks" which may be registered for protection: Trademarks, Service Marks, Certification Marks, and Collective Marks.

Trademarks

Trademarks include any word, name, symbol, or device, or any combination thereof used to identify goods as coming from a particular source, even if that source is unknown. Sounds, colors, scents and shapes have been held protectable as trademarks. Examples include Coca-Cola, Tide, Hershey's, 3M, Sony, Mercedes Benz and McDonalds (for the food products).

Service Marks

Service Marks include any word, name, symbol, or device, or any combination thereof used to identify services as coming from a particular source, even if that source is unknown. Examples include McDonalds (for food service), Federal Express, Amtrack, American Airlines, H. & R. Block, and Marriot. Titles, character names, and other distinctive features of radio or television programs may also be registered as service marks. Examples include The Lion King and Dumb and Dumber.

Certification Marks

Certification Marks include any word, name, symbol, or device, or any combination thereof to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of goods or services or that the work or labor was performed by members of a union or other organization. Examples include The Good Housekeeping Seal of Approval, labor union symbols (look for the IATSE seal at the end of motion pictures, for example), and Underwriter's Laboratories.

Collective Marks

Collective Marks means a Trademark or Service Mark used by members of a cooperative, an association, or other collective group or organization. Or, a Trademark or Service Mark used by any of these to indicate membership in a union, an association or other organization. Examples include the AARP and Rotary Club.

Trade Names

Under the Lanham Act, "Trade Name" and "Commercial Name" mean any name used by a person or entity to identify his, her or its business or vocation. The term "Trade Name" is used differently under the Lanham Act than it was at common law.

Introduction

Trademarks may receive Federal and state protection. Federal protection is generally national in scope and is provided by statute.

Protection Under Federal Law

Protection under Federal law requires registration, and, generally speaking, a trademark, service mark or other mark must have been used on goods or services in the regular course of business prior to registration.

It is possible, however, that registration can be accomplished by filing an application form with the appropriate fee, a drawing of the mark, specimens (samples) of use, and an entitlement statement (stating the applicant believes they own the mark and it is being used in commerce). For a Supplemental Register until such time as they acquire secondary meaning and at that time the owner may make new application for registration of the Principal Register. Some marks — including those which are immoral, deceptive or scandalous, or which are similar to other marks and may cause confusion, or which suggest connections with persons living or dead — may not be registered.

Advantages to Registration

All Federal Registrations gain the following:

• Use of ® as protection against any state requiring changes in the mark.
• Priority rights for foreign registrations under any treaty.

Registration on the Principal Register offers the following additional advantages:

• Constructive notice to later users.
• Evidence of the right to use the mark against any challengers.
• Protection against counterfeiting activity.
• Potential award of up to treble damages and recovery of attorneys' fees.
• The right to have customs exclude importations bearing infringing marks.

The mark is eligible to become "cancelled" if: the mark is abandoned; the mark becomes the generic name for the goods or services; or it is used with permission to misrepresent the source of goods or services.

Protection Under State Law

Trademark protection is derived by statute in some states, by the common law in others, and by both in still others.

Common Law Protection: Ownership of trademarks under common law is strictly derived from actual use of the mark on goods, and, then, only within the geographic area of use. The exclusive right to a trademark belongs to the person or entity who first uses it in connection with specific goods. Traditionally, neither advertising nor an intent to use the mark established trademark rights. Traditionally, common law protection distinguished between "technical trademarks" and "trade names." The former are fanciful and suggestive marks protectable from their first adoption, and they are enforceable in an action for infringement. On the other hand, "trade names" are descriptive marks which become enforceable only after they acquire secondary meaning and then only by an action for unfair competition. The term "trade name": is used differently under the Lanham Act. The requirements for protection — that is, such things as the necessary extent of use, type of use and the relation between the mark and the goods or services — varies from state to state.

Statutory Protection: Some states have adopted trademark statutes. In many cases these are modeled on the Model State Trademark Bill or the Uniform Deceptive Trade Practices Act, or both. The Model State Trademark Bill uses terminology and provides for a registration scheme similar to the Federal Lanham Act statute. Some state statutes have preempted common law protection in that jurisdiction. Others have not.

A Proposed Internet Related State Statute: California has proposed a statute which would forbid the use of another's trade name, registered name, or trademark as a domain name or e-mail address.

Forms of Protection for Unauthorized Uses of a Mark

A valid trademark provides the owner with the right to use the mark free from uses by others that may cause confusion. If someone uses another's mark or a similar mark, the mark owner may bring a civil action for a number of claims. Examples of such claims include: (1) trademark infringement; (2) false designation of origin; (3) false representation or advertising; (4) dilution; and (5) other state or common law unfair competition claims.

Trademark Infringement

The crucial issue in an infringement action is whether there is a likelihood that consumers will be mislead or confused as to the source or origin of the goods or services. This is the basic test used under both common and federal law. To prove infringement, a mark owner must also show that the mark is legally protectable. A mark is legally protectable if it is capable of distinguishing one producer's goods or services from others.

Only owners of federally registered trademarks can bring claims for infringement under federal law. Owners of marks that are not federally registered may bring claims under state statutes.

Factors for evaluating likelihood of confusion include:

• Strength of the plaintiff's mark — how well known is the mark;
• Degree of similarities between the marks;
• Proximity of the goods or services;
• Likelihood that plaintiff will bridge the gap of proximity;
• Evidence of actual confusion;
• The defendant's good faith in adopting the mark;
• Quality of the defendant's goods or services;
• Sophistication of the buyers.

Unfair Competition

The owner of a mark may bring a claim for unfair competition under Section 43(a) of the Lanham Act. It is not necessary to federally register the mark in order to bring such claims. A mark owner may also bring claims under state unfair competition statutes. Section 43 provides for two basic types of unfair competition claims: (1) false designation of origin (passing off), and (2) false or misleading representations or descriptions of facts (false advertising).

Dilution

Dilution law is designed to protect marks against the diminution of the marketing value of the mark. About half the states have dilution statutes. In addition, the Federal Trademark Dilution Act of 1995 protects famous marks against dilution.

Defenses to these claims include: (1) fair use; (2) the First Amendment; and (3) nonuse or abandonment. Fair Use involves several factors: (1) the product or service in question must be one not readily identifiable without using the mark; (2) only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and (3) the user must do nothing that suggests endorsement or sponsorship by the mark owner.

Remedies Available to a Trademark Owner

Trademark owners enjoy a variety of civil remedies against infringers:

• Preliminary or permanent injunction (most typical)
• Monetary relief
• Recalls and Destruction
• Corrective advertising
• Punitive damages

What is Dilution?

Unlike an infringement action, a dilution action does not focus on consumer confusion. Instead, dilution actions are premised on conduct which weakens the distinctiveness or the goodwill associated with a mark.

Dilution can occur through blurring or tarnishment. Blurring is the unauthorized use of a mark on dissimilar products or for dissimilar services that may cause the mark to cease functioning as a unique identifier of the mark owner's goods. Tarnishment occurs where a mark becomes consciously or unconsciously linked with poor quality, unsavory, or unwholesome goods or services.

For various reasons, state statutes are ineffective. First, not all states have dilution statutes, currently only about half the states have such statutes. Second, there is no uniform definition of dilution. Thus, some courts will only enjoin non-competitive, non-confusing uses, while others protect uses on both similar as well as dissimilar products. Third, courts are reluctant to issue nationwide injunctions. Consequently, the recently enacted Federal Trademark Dilution Act of 1995 is expected to provide uniform and nationwide protection for famous marks.

What is the Federal Trademark Dilution Act of 1995?

On January 16, 1996, the United States enacted the Federal Trademark Dilution Act of 1995 (HR 1295, PL 104-98). The Act creates a federal cause of action for the dilution of famous trademarks. The Act adds a new subsection to Section 43 of the Trademark Act of 1946 (15 U.S.C. 1125), entitling the owner of a famous mark to injunctive relief to prevent unauthorized commercial uses that cause "dilution of the distinctive quality of the mark." The Act allows relief regardless of proof of competition between the two parties or a likelihood of confusion.

If the trademark owner proves willfulness in the use of the mark, other remedies, such as monetary relief and destruction of the offending goods, are also available.

Prior to this amendment, the Lanham Act only prevented unauthorized uses of a mark in connection with similar goods or services where the use was likely to cause confusion with respect to the source of the goods or services designated by the mark.

The Act includes a list of nonexclusive factors which a court may consider in ascertaining whether a mark is famous:

• The degree of inherent or acquired distinctiveness of the mark;
• The duration and extent of use of the mark in connection with the goods or services with which the mark is used;
• The duration and extent of advertising and publicity of the mark;
• The geographical extent of the trading area in which the mark is used;
• The channels of trade for the goods or services with which the mark is used;
• The degree of recognition of the mark in the trading areas and channels of trade used by the marks' owner and the person against whom the injunction is sought;
• The nature and extent of use of the same or similar marks by third parties;
• The competition between the owner of the famous mark and other parties;
• The likelihood of confusion, mistake, or deception; and,
• Whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the Principal Register.

The Act expressly does not apply to: fair use of a famous mark by another person in comparative commercial advertising or promotion to identify the competing goods or services of the owner of the famous mark; noncommercial use of a mark; or all forms of news reporting and news commentary.

As with the rest of federal trademark law, the Federal Dilution Law will coexist with state dilution statutes. Thus, owners of marks not considered famous can still seek relief under state statutes or common law theories. The Act also provides that a ownership of a valid federal trademark registration is a complete bar to any dilution action brought under a state statute or a common law theory.

Does the Act Apply to Domain Names?

Although the text of the Act does not specifically mention the Internet, Senator Leahy (D-Vt.) recently indicated the Act may "help stem the use of deceptive Internet addresses taken by those who are choosing marks that are associated with the products and reputations of others." In addition, several recent domain name disputes involved dilution causes of action.

Does the Act Apply to All Forms of Dilution?

The Act includes a definition of dilution as the lessening of the capacity of a famous mark to identify and distinguish goods or services. It is clear that this definition includes protection against "blurring." However, it is unclear, based upon the text of the Act and its definition of dilution, whether it provides also protection against dilutions which cause tarnishment. This has been the subject of much debate.

The express language of the Act appears to require actual dilution rather than a likelihood of dilution. Section 3 of the Act provides that an owner of a famous mark is entitled to relief "if such use causes dilution of the distinctive quality of the mark." Such an interpretation would differ from many of the state dilution statutes, which only require a likelihood of dilution.