Damages « Trademark Law Litigation

March 3, 2009

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Cancellation of trademark (cancellation proceeding) :

A federal trademark registration may be canceled by a court in a civil action, or by the U.S. Patent and Trademark Office in a cancellation proceeding. The grounds for cancellation of a mark include; the mark is likely to cause confusion with a prior mark, it is descriptive of the underlying goods or services, or that the mark is generic.

Causes of Action for Trademarks :

When there is a conflict between marks, there are several types of lawsuits which could be brought including: Trademark infringement in violation of section 32 of the Lanham Act, 15 U.S.C. § 1114; False designation or description in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a); Trademark dilution in violation of section 43(c) of the Lanham Act, 15 U.S.C. §1125(c); Violation of state trademark infringement statutes; Common law trademark infringement; Violation of state unfair competition and deceptive practices statutes; Common law unfair competition; and Common law or state statutory violations of the right of publicity.

Cease and desist letter :

A letter sent by a trademark owner demanding that another company immediately halt using its trademark. These letters are typically accompanied with a threat of a lawsuit if the alleged infringer does not immediately halt use. Before sending such a letter, it is vital that the initiator be 100% certain their rights in the mark are prior to the alleged infringer’s rights. Otherwise, it may be the initiator who must cease use.

Certification mark :

A symbol used to identify goods or services that meet certain criteria such as quality ratings or content levels. Typically, a system of rating is established by an independent organization, and the symbol is then licensed to approved manufacturers or service providers. Examples include: the Good Housekeeping Seal of Approval, the , and the Real symbol used on dairy products.

Class, international :

A designation required on all federal trademark applications that identifies the kinds of goods or services for which a particular mark will be used. This information is available for those searching for prior uses of a mark prior to adopting it. A good search strategy is to broaden the scope of the search for those classes in which the proposed mark may potentially belong. The $245 application fee for a federal registration includes registration for only one international class. Additional classes can be added at a cost of $245 per class.

Clearance Opinion (Availability Opinion) :

The legal opinion provided by an attorney to a trademark owner or prospective trademark owner that identifies the legal risks associated with using a particular trademark. Such risks might include, for example, the possibility of infringing or diluting an existing mark and hence being sued, and the likelihood that an application for trademark registration will be rejected. The legal opinion of an attorney can serve not only as immediate advice on the risks in adopting a given mark, but if the opinion is written, which most are, you may be able to deter companies appearing in the opinion from suing for infringement by showing them that at least one attorney has already decided the marks are not confusingly similar. It is important to note, however, that while attorneys are trained to be objective, the inherent subjectivity of trademark law suggests that a second legal opinion is a very good idea if there is any question about the availability of a mark or about conflicts between marks.

Coined terms (Fanciful terms) :

These are terms that are invented for the sole purpose of serving as trademarks. Examples include CANNON for photographic equipment, UNIX for a computer operating system, LOTTO for shoes, and TOSHIBA for photocopying equipment. Coined marks receive the highest level of protection, because a coined word has no known meaning and therefore has no possible association with the good or service for which it is used. As a result, infringers of these marks are hard pressed to provide any plausible explanation for their use the mark, leaving the impression that the real reason was in fact a blatant attempt to trade off the goodwill generated by the owner of the trademark.

Collective mark :

A symbol used by members of a group to identify their association with the group, such as a union, co-op and trade or professional associations.

Colors, protection of :

Colors, whether one or a combination of them, can be protected under trademark law if the colors otherwise meet the definition of a trademark. In a 1995 case, Qualitex v. Co. v. Jacobson Prods. Co., 514 U.S. 159, the Supreme court rejected earlier lower court decisions that had refused to protect colors as trademarks. Those earlier decisions claimed that businesses would soon deplete the limited supply of colors available, and unfairly prevent others from entering the marketplace, thus creating an undesirable monopoly. The Court in Qualitex pointed out that there are innumerable shades of colors available, thereby rejecting the depletion of colors theory.

Combined application :

An application for trademark registration containing multiple international classes. Each class costs $245 to register, although all the classes can be applied for on one application.

Commissioner :

The Commissioner of Patents and Trademarks in the United States Patent and Trademark Office. At the time of this writing, that position is held by Bruce Lehman.

Common law :

Law originating from court decisions and refined through prior court precedents, as distinguished from law created by the legislative branch of government such as statutes. Common law is also referred to as court-made law.

Comparative advertising :

Comparative advertising is the use of another company’s trademark in order to compare that company’s products with its own. Whether or not comparative advertising qualifies as trademark infringement or dilution is governed by those bodies of law. If, for instance, an ad does not carefully delineate the competitor’s mark from its own, and thereby creates a likelihood of consumer confusion, then the use of the mark is infringing. But, where there is no consumer confusion, or dilution, direct claims about another company’s product are allowed (if the claims are true, of course). For example, Hudson Pharmaceutical Co. was allowed to copy certain elements from the package and label of METAMUCIL, and to state that its own product, REGACILIUM, was equivalent to METAMUCIL. However, Hudson was required to print the word “equivalent” in at least as large of letters as the mark METAMUCIL, to place a ® next to the term METAMUCIL, and to state that METAMUCIL was made by G.D. Searle and that Searle did not make or license REGACILIUM. G.D. Searle & Co. v. Hudson Pharm. Corp., 715 F.2d 837, 839 (3rd Cir. 1983). Similarly, SECOND CHANCE perfume was allowed to state in its materials that it was equivalent to CHANEL No. 5 perfume. Smith v. Chanel, Inc., 402 F.2d 562, 563 (9th Cir. 1968).

Concurrent use :

Use by two or more persons of the same mark in connection with the same or similar products or services, usually limited by geographic boundaries.

Concurrent use proceeding :

An administrative process governed by the Trademark Trial and Appeal Board in which the Board reviews an application for a concurrent use registration, and sends notice to the party identified in the application that their the rights in their mark may be limited as set forth in the application. The non-applicant party has forty days to answer, otherwise the limitations specified in the concurrent use application will be entered as a judgment.

Concurrent use registration :

A federal registration which delineates certain limitations on the use of a mark due to the concurrent use of a similar mark. Generally speaking, the first of two companies to use a mark is entitled to nationwide registration rights, except for the specific geographic area in which the second company is using the mark, even if the first user has not used the mark nationwide. If the second user is the first to register, then the second user is the one that receives nationwide registration subject to the first user’s geographic region. Concurrent users may agree to leave open certain regions permanently or else long enough for one or the other to begin actual use in that region.

Conflicts between trademarks :

Conflicts between trademarks can occur due to two marks being similar to each other in such a way that consumers are likely to be confused as to which is which. The result of a conflict can lead to one side abandoning their rights rather than fight, or may lead to negotiation, arbitration, mediation, or a lawsuit. There are several different theories of law (causes of action) that relate to trademarks.

Confusion (Confusingly similar) :

This is the legal standard that defines whether or not trademark infringement has occurred, or whether or not a trademark registration can be issued. Click here for more information on what constitutes confusingly similar.

Constructive notice :

Constructive notice is a legal fiction. In the context of proving good faith as a defense in a trademark infringement lawsuit, constructive notice replaces the requirement that the defendant have actual knowledge of plaintiff’s prior use of a mark. Thus, instead of having actual knowledge, bad faith is said to exist.

Constructive use :

Where use of a trademark is deemed to have occurred even without actual use, pursuant to a statute. The legal effect is the same as if there were actual use.

Copyrights :
Ownership rights in expressive works (not ideas), granting the owner exclusive control over distribution, display, copying, performance, and adaptation of those works. The Copyright Office is the umbrella of the Library of Congress that governs the registration of copyrighted works.

Corporate name :

Also known as a trade name or trade name, it is the name under which a company conducts its business. Whereas a corporate name identifies the business itself, trademarks identify goods or services. A corporate name can also serve as a trademark if it meets the requirements of a trademark. If so, the corporate name also merits protection under state and federal trademark and dilution laws. However, a corporate name has no exclusive trademark rights unless it is used as a trademark. This is so, even if the name is registered with the appropriate state body regulating business names, usually the Secretary of State.

Correcting mistakes in a registration (Amendments) :

The USPTO permits trademark owners to modify certain information on an existing trademark registration for a filing fee of $100.

Costs, as a measure of damages for infringement :

Court costs can be recovered by the prevailing party as a matter of course, unless the court directs otherwise. This includes filing fees, court reporter fees if necessary to use transcripts in the case, printing and witness fees, and compensation for court-appointed experts. What constitutes a prevailing party is not always obvious. The plaintiff need not win on all claims to recover costs as the prevailing party. Sometimes the defendant may recover costs, as for instance if the case is dismissed with prejudice. Some statutes provide specifically for award of attorneys’ fees as costs, such as in the Racketeer Influenced and Corrupt Organizations Act. 18 U.S.C. §1926(c).

Costs, for trademark legal services :

Costs will obviously vary based on what services you need.

Counterfeit Goods:

Goods bearing a trademark that is either identical with, or substantially indistinguishable from, a federally registered mark. While infringement of a trademark requires confusing similarity between marks, regardless of the intent of the infringer, counterfeiting can only occur when the perpetrator knowingly used the counterfeit mark with an intent to traffic in the goods bearing such mark. Trafficking in counterfeit marks may be a criminal offense, and can lead to treble damages when pursued in a civil court. The U.S. Customs Bureau and the International Trade Commission can help trademark owners stop the importation of counterfeit goods into the United States.

CTM (European Community TradeMark)

An international treaty providing for “one-stop” trademark registration for all European Union country members. As of yet, trademarks continue to be governed by each individual European country’s laws, and there is no harmonization of laws.

Customs Bureau, role in trademarks :

U.S. Customs officials can demand disclosure of the identity of any trademark on imported goods, and under certain circumstances, seize goods bearing infringing marks. Congress has authorized Customs Bureau involvement in preventing the importation of counterfeit goods, gray-market goods and goods bearing infringing trademarks. Such goods can be seized at the border. However, what happens to them after seizure depends on which category they fit into. Counterfeit goods will be destroyed or given to charity after removal of the trademark. Infringing marks will be sent back to the place of origin, or enter the U.S. after removal of the mark. Or, upon consent of the U.S. trademark owner, counterfeit goods or goods bearing infringing marks may enter the U.S. In order for the Customs Bureau to take action at the border, the U.S. trademark owner will have to record with Customs their federally registered mark (or trade name if used for six months). Additionally, trademark owners typically have to alert Customs of specific counterfeit or infringing activity, just as a practical matter, since Customs has far too many trademarks to effectively monitor without such assistance. For more information, visit the US Customs site at http://www.customs.ustreas.gov/imp-exp2/ipr/iprbroch.htm

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Damages :

A monetary amount awarded to the plaintiff by the court in order to compensate the plaintiff for actual injury sustained by the actions of the defendant. In trademark cases, the basis of damages is typically the plaintiff’s lost profits or defendant’s profits as a result of the infringing activity, and may include prejudgment interest. Additionally, damages have been based on a reasonable royalty or a the cost of corrective advertising. Finally, the court may award treble damages to the plaintiff where the court deems such damages as equitable and not punitive.

Database, trademark :

Many businesses now provide over the Internet databases of existing and pending trademarks, which the user can search, usually for a very reasonable fee. The services vary in their timeliness and whether or not state trademark registrations are available. The only free database is maintained by the U.S. Patent and Trademark Office (USPTO) itself, and can be accessed on the Internet at http://www.USPTO.GOV/tmdb/index.html. While this site provides a decent replacement to the CASSIS databases located in specific depository libraries around the country, it can be anywhere from several days to a couple months old. Furthermore, it does not include common law marks nor state registrations. As such, it should be used only as a means of eliminating potential marks prior to investing any money on a more comprehensive search.

Date of first use :

The date a mark was first used anywhere. In the United States, the first to use a mark generally has priority, and can exclude all subsequent users of identical or confusingly similar marks.

Date of first use in commerce :

To secure a date of first use in commerce the mark owner must use the mark in trade in a manner that allows consumers to rely on it to identify and discriminate between the user’s goods or services from those of competitors’. Furthermore, since the authority for the Trademark Act is based on the interstate commerce clause, the user must also demonstrate use in interstate commerce in order to obtain a federal registration. The interstate commerce requirement is met so long as use of the mark in trade includes activity that either crosses state lines or affects interstate commerce directly or indirectly such as by selling products or services to interstate travelers.

Dates, priority :

A priority date is the date used to determine which of two opposing parties in a trademark dispute should prevail. Generally speaking, the one with the earliest priority date wins. The United States is one of few countries in the world that deems the date a mark was first used to be the priority date. Most other countries set the priority date as the date a mark was first registered. One exception to the U.S. system of setting priority dates is for the Intent to Use application, in which the priority date is becomes the date the application was filed rather than the date the mark is first used.

Deceptive marks :

These are marks that cannot be registered as trademarks because they mischaracterize or mislead consumers as to the underlying product. The usual test for determining whether or not a mark is deceptive is: (1) the mark misdescribes the character, quality, function, composition or use of the underlying product; (2) purchasers are likely to believe that the misdescription actually describes the goods; and (3) purchasers are likely to rely upon the misdescription in making their purchasing decision. Some courts have simply looked for an intent do deceive, instead of apply this test. In any event, if the mark is misleading, but does not qualify for being a deceptive mark because, perhaps, the mark’s owner had no bad intent, or because there is not likely to be any reliance by purchasers on the misleading description, then the mark is a deceptively misdescriptive mark.

Deceptively misdescriptive marks :

Deceptively misdescriptive marks are those that incorrectly describe features of the underlying services or goods to which the mark is affixed. Like deceptive marks, deceptively misdescriptive marks tend to mislead consumers as to the underlying product. However, deceptively misdescriptive marks do not meet the requirements of a deceptive mark (i.e. bad intent or reliance by purchasers upon the misdescription). As such, deceptively misdescriptive marks can be registered on the Principal Register once they acquire secondary meaning.

De facto secondary meaning

De facto secondary meaning exists where an interest in the public good overrides the protection of a mark that otherwise serves to identify source for consumers and has acquired secondary meaning. De facto secondary meaning exists when a mark is generic or functional. These types of marks can never be granted exclusive rights, even if the mark owner has done everything possible to preserve rights in the mark through proper usage, policing or a heavy advertising campaign resulting in secondary meaning. There is a strong public interest in allowing competitors to all use words that inform the public about the nature of their goods, but doing so is nearly impossible if exclusive rights are granted in the words necessary to describe a product. For this reason, the doctrine of de facto secondary meaning precludes the granting of monopoly powers available under trademark law.

Defendant’s profits as damages :

Where the plaintiff cannot show harm from lost profits, some courts may still award any of defendant’s profits in order to avoid unjust enrichment of the defendant, but such an award is reserved for when the defendant intentionally infringed plaintiff’s mark. If awarded, defendant’s profits are calculated by plaintiff proving defendant’s gross sales, and then defendant proving any deductions based on overhead, operating expenses, materials or labor. Documentary evidence is typically required for defendant to prove any deductions.

Defenses to dilution :

The following provide a bar or defense to a claim of trademark dilution: (1) the mark used is a federally registered trademark (only bars claims of dilution brought under state or common law; not those under the federal law); (2) use of a famous mark by another person in comparative advertising to identify the competing goods or services; (3) noncommercial use of a mark; and (4) all forms of news reporting and news commentary. In addition to these defenses, which are all specifically identified in the Dilution Act, many of the same defenses for trademark infringement are also likely to apply. However, since the Federal Trademark Dilution Act is relatively new (1996), it is uncertain how the courts will interpret the applicability of these defenses.

Defenses to infringement :

A claim of trademark infringement can be responded to by either attacking plaintiff’s own trademark rights or else denying the existence of trademark infringement or dilution. The defendant may be able to argue the following defenses: (1) plaintiff abandoned the mark; (2) plaintiff engaged in fraud when registering or maintaining registration of the mark; (3) the mark is generic (4) plaintiff engaged in trademark misuse by using exclusive rights in the mark to violate the law; (5) plaintiff delayed unreasonably before asserting or enforcing rights against defendant (laches) and therefore should be stopped form claiming infringement (estoppel); (6) the mark is functional; (7) plaintiff’s explicit or implicit conduct reasonably offered assurances to defendant that plaintiff would permit defendant’s use of the mark (acquiescence); (8) defendant is not using the mark as a trademark, but merely to describe defendant’s own products (fair use); (9) defendant is not using the mark in a manner that is likely to cause confusion; (10) the First Amendment protects free expression, including certain uses of trademarks such as parody.

Depository libraries :
These are selected public libraries that house the CASSIS database containing all existing and pending federal trademarks maintained by the U.S. Patent and Trademark Office (USPTO). Beware that the these databases may be up to three months old before receiving updates from the USPTO. While they are usually free, there can sometimes be lines to get onto a host computer in the library. Alternatively, the USPTO now has available a searchable database over the Internet (still not timely updated). You can check their database at http://www.USPTO.GOV/tmdb/index.html.

Description of goods or services :

A description of goods or services is required in all applications for federal trademark registration. Descriptions should be limited to those goods and products which are currently being sold under the proposed mark (or will be sold, if an Intent to Use application is filed). According to the United States Patent and Trademark Office (USPTO), the description should be concise, not vague or overly broad, and should consist of the common commercial description of the goods or services. At the same time, broader descriptions have the potential, if not rejected by the USPTO Examiner, of ultimately providing broader protection. Thus, there is always a tension between drafting a description that is narrow enough to pass the examination, yet broad enough to offer protection out to the boundaries of the goods or services being registered.

Descriptive marks :

Trademarks that describe the ingredients, qualities, features, purpose or characteristics of a product or service. These marks are not inherently distinctive, and thus do not receive trademark protection unless they acquire distinctiveness through secondary meaning. Even if they qualify for trademark protection, descriptive marks are the weakest marks possible, and do not receive as broad of legal protection as suggestive, arbitrary and fanciful marks. Examples of descriptive marks include: BEEF & BREW for a restaurant, LASERGAGE for a laser measurement device, PIZZAZZ for pizza, and WORLD BOOK for encyclopedias. In contrast to suggestive marks, a mark that is merely descriptive immediately conveys knowledge of ingredients, qualities, or characteristics with no imaginative leap required. If a composite mark is not 100% descriptive, then the mark as a whole is not “merely descriptive.”

Designs, protection of :

Drawings or designs may be protected as a trademark as long as the drawing or design is used as a trademark. Generally speaking, if the design is an accurate or realistic portrayal of the goods or services that the mark serves to identify, then the mark is descriptive, and receives no protection unless the owner can demonstrate secondary meaning. However if the picture deviates from the underlying goods or services, then the design will be viewed as distinctive, and can receive protection. Common components such as basic geometric figures, stripes or even flowers may be seen as lacking distinctiveness unless the owner can demonstrate secondary meaning.

Dilution Statutes :

State and federal statutes that allow the owner of a famous trademark to prevent uses of its mark by other companies in such a way as to tarnish or blur the distinctiveness of the mark. Unlike lawsuits under a traditional trademark infringement lawsuit, the plaintiff in a dilution suit need not prove that there is a likelihood of confusion between the famous mark and the challenged mark.

Disclaimer, in a trademark registration :

A statement that the trademark applicant or owner does not claim exclusive rights in an unprotectable component of a federally registered mark.

Disclaimer, in conjunction with use of another person’s mark :

A statement by the user of another company’s trademark that the user is not affiliated with the trademark owner. Such a statement will not automatically relieve the user’s liability for trademark infringement. However, if the disclaimer is found by a court to be effective in eliminating consumer confusion as to the affiliation between the two companies. Thus, if the disclaimer is likely to be seen by those who see the trademark, then there is a good chance the disclaimer is effective in eliminating consumer confusion.

Distinctiveness :

The ability of a mark to allow the relevant consuming public to discriminate the source of a product or service. Distinctiveness is a prerequisite to trademark registration on the Principal Register. Fanciful, arbitrary, and suggestive marks are inherently distinctive, while descriptive marks are not distinctive unless used extensively enough to develop a certain level of market awareness, called secondary meaning.

Distinctiveness requirement :

The requirement by the U.S. Patent and Trademark Office that all marks listed on the Principal Register must be distinctive. Marks that are not distinctive may still be federally registered, but are only listed on the Supplemental Register, and do not have many of the benefits of registration on the Principal Register. Courts also require that a mark be distinctive in order for it to have any protection under the common law.

Documenting First Use :

Because trademark rights in the United States on a first to use basis, it is important to document the first date you use a mark. This may be done by taking a dated photograph of the goods bearing the mark or keeping the original advertising if it shows the date the ad ran. You should also keep records of the first sale of goods or services made using the mark. This may include a bill of sale or invoice. If you do not have a dated photograph or advertisement, you might want to notarize a statement on the back of a photo or ad such as “This photo was taken on 12/31/98,” or “This ad was placed on 12/31/98.” While this provides perhaps less convincing evidence than a dated photo or ad, it is far better than a photo or ad with no date.

Domain name
A component of an Internet address (URL) which is comprised of a top-level domain such as .com or .net and a second level domain, which is the part the domain name owner gets to make up. For more information visit:

http://www.dtip.net and http://www.domainsbuyerguide.com

Domain name hijacking :

A hijacker in this context is one who purchases one or many domain names, and attempts to sell them later on to the highest bidder — often a corporation owning a famous trademark that is identical to the second level domain being sold. This disparaging term is generally reserved for those individuals who purchased the name with no business purpose in mind other than to sell it to the trademark owner or keep it from the hijacker’s competitor. There are of course examples of legitimate businesses fighting over a single domain name as well. In the case of hijackers, the new Federal Trademark Dilution Act has been very effective in helping corporations with famous marks retain domain names consisting of their famous marks. However, there are also a few examples of corporations bullying people out of their domain names under the guise of trademark ownership, even though the particular use of a domain name does not constitute trademark infringement or dilution, or unfair competition in any manner. These latter kinds of cases are referred to as reverse domain name hijacking cases, and some have speculated that this conduct by companies may be met with cancellation of their mark under the doctrine of trademark misuse.

Domain dispute policy :

This refers to a policy developed by Internic (the body that registers most domain names in the U.S.) that can be invoked when two parties have a dispute over rights in a domain name. Typically, these disputes involves at least one party who claims the domain name infringes or dilutes their trademark rights. The policy has been revised a couple times in an effort to reduce the amount of litigation and hassles Internic has had to contend with. Currently the policy can be read at http://www.internic.net/domain-info/internic-domain-6.html The predominant feature of the policy (ver. 3) are that anyone who has a trademark registration issued by any country may ultimately stop the domain name owner who is using the registered trademark as a domain name. The policy has been severely criticized on the basis that it fails to accommodate the fact that trademark law permits use of the same mark for unrelated products or services. Internic’s policy has also been criticized because it unfairly favors owners of registered trademarks, even though trademark rights in this country are not granted by registration, but by use. Registrations are only effective under the dispute policy if they were obtained prior to the acquisition of the domain name. For this reason, trademark registration is more important than ever, if you plan to do business on the Internet.
Another important trademark registration consideration prompted by Internic’s current dispute policy is whether or not to register design features of marks. Internic’s policy currently excludes from its protection any trademarks incorporating a design. It appears from the plain language of the policy that Internic intended to exclude from protection all lingual marks that are portrayed with special typefaces or colors, as opposed to excluding only those marks that are registered specifically as design marks, which happen to have words in them as well. Thus, if you want to protect design features of a mark, be sure to register a text-only mark without claiming protection for typeface or color, etc., in addition to a registration with the design features.
Domestic representative :

A resident of the United States to whom service of process may be sent regarding the trademark. Foreign applicants for trademark registration are required to have a Domestic Representative unless they are also represented by an attorney in the United States.

Drawings, protection of :

Drawing page of trademark application :

All applications for trademark are required to be accompanied by a separate drawing page, even if the mark being registered is strictly text. In the case of lingual or text marks, you need only type the mark IN ALL CAPS. The trademark office has an elaborate set of very rigid regulations for submitting the drawing page, including codes for coloring, and a size limitation of 4″ x 4″.

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