Trademark infringement
Violation of trademark rights
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Through Trademark
If the respective marks and products or services are entirely dissimilar, trademark infringement may still be established if the registered mark is well known pursuant to the Paris Convention. In the United States, a cause of action for use of a mark for such dissimilar services is called trademark dilution.
In some jurisdictions a party other than the owner (e.g., a licensee) may be able to pursue trademark infringement proceedings against an infringer if the owner fails to do so.
Likelihood of confusion
Section 32 of the Lanham Act states that those who use similar or identical trademarks, products, or services, to those already registered with the USPTO in such a way as "likely to cause confusion, . . . cause mistake, or to deceive. . . shall be liable in a civil action by the registrant . . . ." Where the respective marks, products, or services are not identical, similarity will generally be assessed by reference to whether there is a likelihood of confusion that consumers will believe the products or services originated from the trademark owner.
Likelihood of confusion factors
A typical likelihood of confusion test balances a variety of factors, none of which is dispositive on its own. While each jurisdiction uses a slightly different test, every test considers (1) whether and to what extent the alleged infringer intended to infringe on the senior user's valid trademark rights, (2) evidence of any consumer confusion, and (3) factors that speak to the economic relationship between the consuming public and the two marks, products, or services.
The most famous of the foregoing tests is the one employed by the United States Court of Appeals for the Federal Circuit (the "DuPont" Factors). However, this is because it is the test used by USPTO when assessing the registrability of a mark upon application. In any legal action for trademark infringement in the United States, the court will apply the test of the circuit in which it is located.
Types of confusion
Courts assess likelihood of confusion in various contexts, including prior to the sale (also known as initial interest confusion), at the point of sale, and post-sale. Confusion may also be direct or reverse, depending on who the senior and junior user of the marks are.
Point-of-sale confusion
The most typical form of trademark infringement is point-of-sale confusion, which occurs when a consumer mistakenly believes that their product or service is from a company or brand in which it is not. This type of infringement involves a defendant "passing off" a good or service utilizing a trademark that belongs to the plaintiff, usually with the intent of deceiving consumers into thinking that the good or service originated with the plaintiff.
For example, in McDonald's Corp. v. Druck and Gerner, D.D.S., P.C., McDonald's sued McDental, a dental services provider operated by two dentists, for trademark infringement. McDonald's presented evidence that it owned trademark rights in a family of marks beginning with the prefix “Mc,” that there was widespread public familiarity with that family of marks, and that survey evidence established that confusion was likely to occur from the use of the McDental name. McDental's owners denied any intention to evoke McDonald's marks in their adoption of the McDental name, alleging that they had never perceived or heard anyone else perceive an association between the two marks. The United States District Court for the Northern District of New York found that the similarity between the McDental name and McDonald's family of brands beginning with “Mc” was obvious. The court held that McDonald's had shown that a likelihood of confusion existed, warranting the issuance of an injunction.
Initial interest confusion
Initial interest confusion occurs when an allegedly improper use of a trademark attracts potential purchasers to consider products or services provided by the infringer (bait-and-switch). Under the Lanham Act, a plaintiff may bring a trademark infringement claim against a defendant for creating consumer confusion prior to the point of sale, even if the consumer confusion is resolved before the sale goes through.
For example, in Playboy Enterprises, Inc. v. Netscape Communications Corp., Playboy sued Netscape for selling banner ads using trademarked terms "playboy" and "playmate." The United States Court of Appeals for the Ninth Circuit held that Playboy was likely to show that consumers may be attracted to competitors' products by free riding Playboy's reputation when using the trademarks "playboy" and "playmate", even if the consumers are well aware that they are not buying services from Playboy.
Post-sale confusion
Post-sale confusion occurs when the use of a trademark leads individuals of the general public (other than the purchaser) to mistakenly believe that a product was manufactured by the trademark holder. Thus, for the purposes of a likelihood of confusion analysis, the relevant audience may not be the targeted purchasers at all, but rather the general public, otherwise known as the "person on the street."
As articulated by the United States Court of Appeals for the Second Circuit, trademark law protects the public from incurring harms caused by post-sale confusion: "Trademark laws exists to protect the public from confusion. The creation of confusion in the post-sale context can be harmful in that if there are too many knockoffs in the market, sales of the original may decline because the public is fearful that what they are purchasing may not be an original. Furthermore, the public may be deceived in the resale market if it requires expertise to distinguish between an original and a knockoff."
For example, in Ferrari S.P.A. Esercizio v. Roberts, Ferrari S.P.A. Esercizio, a luxury-automobile manufacturer with a reputation for producing exclusive vehicles with distinctive designs, brought a trademark infringement suit against Carl Roberts after Roberts began manufacturing and selling kits that would allow budget-conscious car enthusiasts to copy the exterior designs of Ferrari (e.g., the Daytona Spyder, the Testarossa) onto the undercarriage of less expensive vehicles. Although Roberts has shown that confusion did not exist at the point of sale, the United States Court of Appeals for the Sixth Circuit concluded that allowing the kits to enter into commerce would dilute the Ferrari brand by diminishing the perceived exclusivity and quality that make the Daytona Spyder and Testarossa attractive to consumers. The court further held that the kits were designed to perfectly replicate the exterior of Ferrari's vehicles, and there was a strong likelihood of post-sale customer confusion. The Sixth Circuit held that Roberts's kits infringed upon the distinctive trade dress of Ferrari's vehicles, and a permanent injunction against Roberts was affirmed.
Direct confusion
Direct confusion occurs when consumers believe that the goods or services of a later (junior) trademark user come from, or are sponsored by, the prior (senior) trademark holder. In cases of direct confusion, the junior user is said to free ride on the reputation and goodwill of the senior user. Direct confusion typically occurs if the senior user is a much larger or better-known producer than the junior user.
Reverse confusion
Reverse confusion occurs if consumers incorrectly think that a later (junior) trademark user is the source of the prior (senior) trademark user's products or services. Reverse confusion typically occurs if the junior user is a much larger or better-known producer than the senior user.
Reverse-confusion claims exist to prevent big companies from stealing marks or brands from existing, smaller companies. Factors contributing to a likelihood of reverse confusion include: (1) similarity between the senior and junior user's marks, (2) the conceptual strength or uniqueness of the senior user's mark and the commercial strength or public awareness of the junior user's mark, (3) consumer attentiveness to the product, (4) the length of time junior user has used the mark without causing confusion, (5) whether the junior user intended to cause confusion, (6) evidence of actual confusion, (7) trade and advertising channels for the competing products, (8) the similarity of the manufacturers’ sales efforts, (9) the competing products’ similarity in the minds of consumers, and (10) facts suggesting that consumers would expect the junior user to manufacture both products or expand into the senior user's market.
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Contributory infringement
The Supreme Court first held that liability for trademark infringement could extend beyond direct infringers in Inwood Laboratories, Inc. v. Ives Laboratories, Inc. The Supreme Court articulated the following standard for contributory infringement: "If a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer or distributor is contributorily liable for any harm as a result of the deceit."
For example, in Fonovisa, Inc. v. Cherry Auction, Inc., the United States Court of Appeals for the Ninth Circuit imposed secondary liability on a flea market landlord who provided the “necessary marketplace” for the sale of infringing goods. The court held that contributory trademark infringement existed because the landlord was willfully blind to its tenant's ongoing infringement.
Defenses
The party accused of infringement may be able to defeat infringement proceedings if it can establish a valid exception (e.g., comparative advertising) or defense (e.g., laches) to infringement, or attack and cancel the underlying registration (e.g., for non-use) upon which the proceedings are based. Other defenses include fraud, genericness, functionality, abandonment, or fair use.
Exceptions
Comparative advertising
Comparative advertising occurs when one party uses another party's trademark to refer to the trademark owner or its goods or services. The Federal Trade Commission allows comparative advertising where the bases of the comparison are truthful, non-deceptive, and clearly specified. The user of the trademark cannot imply or suggest sponsorship, endorsement, or affiliation by the mark owner. If the user uses the trademark in a way that does not confuse or mislead consumers and only uses as much of the mark as necessary for identification (e.g., use of the words but not use of the same font or graphics), then this may be considered fair use.
Defenses
Laches
Laches is an equitable defense. The doctrine applies when a defendant affirmatively establishes: (1) knowledge by the plaintiff of facts constituting a cause of action or a reasonable opportunity to discover such facts; (2) an undue delay by the plaintiff in commencing an action; and (3) damage to the defendant resulting from the delay in bringing the action.
Fraud
A viable defense to trademark infringement may assert "[t]hat the registration or the incontestable right to use the mark was obtained fraudulently."
A defense of fraud by the trademark owner can be raised at any time, and includes proving that: (1) the applicant made a false representation to USPTO; (2) the false representation is material to the registrability of a mark; (3) the applicant had knowledge of the falsity; and (4) the applicant made representation with the intent to deceive the USPTO.
Genericness
Trademarks that evolve over time into a generic term for a class of items, rather than remaining a source-identifying distinctive term, may lose trademark status. Genericide is a doctrine in which a formerly-protectable mark is held to be unprotectable because it no longer signifies the source or producer of the product (e.g., Aspirin as a product made by Bayer) but instead a category or genus of product (aspirin as pain reliever that a generic manufacturer can call their product).
A genericness argument alleges that a formerly-protectable mark has become generic in a specific market or industry as signifying not the producer but a category or genus of product.
Functionality
The functionality doctrine states that functional product features cannot be trademarked. Functionality is a recognized defense to trademark infringement in U.S. law. This defense prevents trademark protection from overriding patent protection by ensuring that no mark can be registered if it is functional as a whole.
For example, in Valu Engineering, Inc. v. Rexnord Corp., the court decided that certain conveyor belt shapes were functional due to their increased performance over alternative designs and were therefore not eligible to be considered a trademark.
The Supreme Court has held that a product is functional if:
(1) it is essential to the use or purpose of the article, or if it affects the cost or quality of the article; OR
(2) the exclusive use of the functional feature would put competitors at a significant disadvantage.
Abandonment
Abandonment of a trademark occurs when the owner of the trademark deliberately ceases to use the trademark for three or more years, with no intention of using the trademark again in the future. When a trademark is abandoned, the trademark owner may no longer claim rights to the trademark. In effect, this frees the trademark so that anyone else can use it without recourse from the original trademark owner.
Fair use
The Lanham Act's fair-use exception is an affirmative defense requiring the defendant to prove that the term was used in good faith and in a descriptive manner for a purpose other than as a mark. The Lanham Act includes a fair-use exception, under § 1115(b)(4), for trademarks that consist of descriptive words, to prevent trademark monopolies over the use of descriptive terms.
There are two types of fair use, descriptive fair use and nominative fair use.
Descriptive fair use allows a third party to use another party's descriptive trademark to describe its own product or service. In order to successfully assert a fair-use defense to a trademark infringement claim, the defendant must prove the three elements of the fair-use doctrine: (1) that the term was used in a way other than as a mark; (2) that the term was used to describe the goods or services offered or their geographic origin; and (3) that the use had been undertaken in good faith.
Nominative fair use allows third parties to use another party's trademark to refer to that party's actual product or service. The use must not create a likelihood of confusion and cannot imply sponsorship or endorsement by the trademark owner where none exists.
Remedies
Injunctive relief
Injunctions are court orders commanding that the infringer immediately cease its unlawful activities. A plaintiff will be entitled to injunctive relief for trademark infringement if they show probable success on the merits and the possibility of irreparable injury.
Monetary relief
Pursuant to 15 U.S.C. § 1117(a), a plaintiff can recover the infringer's profits, any damages sustained, and the costs of the action. In assessing profits, the brand owner must prove only the gross amount of the defendant's sales. Thereafter, the defendant has the burden of providing evidence of any amount that should be deducted.
An accounting of profits is proper in a trademark infringement case only where the defendant engages in willful infringement, meaning that the defendant attempted to exploit the value of an established name of another. Alternatively, a plaintiff may recover damages incurred if they show a reasonable forecast of lost profits.
Globally
The ACTA trade agreement, signed in May 2011 by the United States, Japan, Switzerland, and the EU, requires that its parties add criminal penalties, including incarceration and fines, for copyright and trademark infringement, and obligated the parties to actively police for infringement.
In many countries with common law, a trademark which is not registered cannot be "infringed" as such, and the trademark owner cannot bring infringement proceedings under statute. Instead, the owner may be able to commence proceedings under the common law for passing off or misrepresentation, or under more general legislation which prohibits unfair business practices. In some jurisdictions, infringement of trade dress may also be actionable.
Notable cases
- Facebook, Inc. v. Power Ventures, Inc.
- Google, Inc. v. American Blind & Wallpaper Factory, Inc., in which Google's AdWords program was alleged to be in violation of trademark
- Rescuecom Corp. v. Google Inc., in which the use of trademarks in Google's AdWords program was found to be a "use in commerce" under the Lanham Act
- Network Automation, Inc. v. Advanced Systems Concepts, Inc., in which the use of a competitor's trademark as an Internet advertisement search keyword was found to not constitute trademark infringement
- College Network, Inc. v. Moore Educational Publishers, Inc., in which the use of a competitor's trademark does not qualify as a "use in commerce" is upheld
- Polaroid Corp. v. Polarad Elects.
- Inwood Laboratories, Inc. v. Ives Laboratories, Inc.
- Mickey SRL. v. The Walt Disney Company
- TAPE Inc. v. Tito Sotto, Vic Sotto, and Joey de Leon (TVJ)