Measure of damages « Trademark Law Litigation

March 3, 2009

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Filed under: Trademark Glossary — Tags: agreement, defense, dilution, infringement, Labels, Laches, Lanham Act, lawsuit, legal, Legal strength of a trademark, Letters, License, Licensee, Licensor, Likelihood of Confusion Test, lingual marks, Litigation, Lost profits, Measure of damages, Plaintiff, Trademark Act, Trademark litigation, trademark owner, trademark protection — admin @ 5:31 pm

Laches, defense of :

A defense based upon plaintiff’s inexcusable delay in asserting or attempting to enforce trademark rights. This doctrine is based on the theory that equity rewards the vigilant and not those who slumber on their rights.

Labels, trademark protection of :

Labels on goods can be protected under trademark law if the features on the label for which trademark protection is claimed identifies source for consumers, and if such features are not functional. Product labels fall into a rapidly expanding area of trademark protection for trade dress.

Lanham Act :

Otherwise known as the Trademark Act of 1946, this statute provides protection against trademark infringement, trademark dilution, and false designation, description or representation. The act also governs procedures for federal trademark registration. The Act is contained in Title 15 of the United States code, sections 1051-1127.

Legal strength of a trademark :

Strength of a mark can be measured on two different levels; marketing strength and legal strength. Words that describe very closely the underlying good or service they represent have strong marketing potential, since such marks immediately communicate to customers what the product actually is or does. An example is “Quick Fix Radio Mix.” This tells the customer immediately that it is a substance that fixes radios quickly. The problem with using descriptive marks such as these is that they are weak from a legal perspective. The legal strength of a mark is generally measured by its distinctiveness, not its descriptiveness. In fact, distinctiveness and descriptiveness are almost two ends on the same spectrum. Generally speaking, the more distinctive the mark, the stronger is the legal protection available for that mark, but the less ability the mark has to communicate with the consumer. Distinctive marks are those that are coined or fanciful (made up), or suggestive (suggesting qualities of the underlying products, without plainly describing them).

Letters, trademark protection of :

Alphabetic and Alphanumeric characters can be protected under trademark law, and indeed comprise the most common form of trademark, otherwise known as textual or lingual marks. Such marks receive their broadest protection if they are used as trademarks in block-letter format, i.e. without specialized fonts, coloring or other stylized features. Alternatively, if lingual marks are used with stylized features, but registered as block letters alone, or used in a variety of different stylized formats, then protection can more reasonably extend to all similar configurations of letters.

License :

An agreement between a trademark owner and one or more other parties that allows the other parties to make limited, specified use of the trademark in question. Licensing of trademarks can result in the loss of the trademark unless the license arrangement provides for a certain degree of control over the licensed use.

Licensee :

The party to whom a trademark owner grants a license to use a trademark.

Licensor :

The trademark owner who is licensing a trademark to the trademark licensee(s).

Likelihood of Confusion Test :

An analysis of whether confusion is caused when the mark in question is used to identify the same or closely related goods or services as an existing mark. If the relevant consuming public will be confused or mistaken about the source of product or service sold using the mark in question, then likelihood of confusion exists, and that mark can be excluded from being used by the prior mark owner. The likelihood of confusion test is one of several examinations conducted by the U.S. Patent and Trademark Office in determining whether to approve an applicant’s trademark application. The test is also used in trademark infringement lawsuits to determine whether or not the defendant is liable for infringement.

Lingual Marks :
These are trademarks in the form of either words or phrases, and are the most widely used kinds of marks. Depending on the meaning of the word or phrase, these marks have more or less legal strength.

Litigation :
A lawsuit. In order to litigate a trademark conflict, there must be a legal cause of action such as infringement or dilution. Trademark litigation often occurs on a very fast schedule since the plaintiff usually requests the court to grant a temporary injunction to stop the alleged trademark infringer from using the mark until the whole dispute can be resolved through a longer process. If a court grants the injunction, the defendant typically settles quickly and changes marks because the incentive for litigating a mark that cannot be used (at least in the short term) is obviously prohibitive since goodwill will have to be generated under a new name.

Lost profits, as a measure of damages :

The plaintiff’s lost profits may be awarded as damages in a trademark lawsuit, but monetary relief is generally reserved for cases of intentional infringement. To receive plaintiff’s lost sales as damages, the plaintiff must show that if it were not for the defendant’s infringing activities the plaintiff would have had a certain number of sales that were not in fact had. Proving this is often difficult since there may be a number of reasons besides defendant’s infringing use of the mark that could account for plaintiff’s lost sales. As such, a market survey may be necessary to prove such damages.

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Madrid Agreement :

The Madrid Agreement Concerning the International Registration of Marks is an international treaty signed originally in 1891. It is designed to simplify the filing of trademarks and service marks in different countries. The treaty provides for the international registration of an approved trademark by a single filing in one language, under one procedure, with the payment of one fee. Nationals of member countries must first register their trademark in the country of origin prior to international registration. For this reason, the treaty tends to favor countries having the least rigorous application procedures, and consequently the United States and Canada, having more elaborate trademark registration procedures, have declined to become signatories.

Mark :
Any trademark, service mark, certification mark, or collective mark.

Market survey :

Research conducted by an independent firm and used to support arguments before the US Patent and Trademark Office or civil courts when trying to prove various aspects of trademark viability. For example, a survey may be useful to prove that a mark has acquired secondary meaning, is not generic, is not functional, is legally strong, or is not likely to confuse consumers with regard to an existing trademark. Surveys can also be used to prove plaintiff’s lost profits, which is evidence that is notoriously difficult to obtain without a survey. According to Phyllis J. Welter, an expert on trademark surveys, the discussion of surveys in trademark litigation has grown from roughly 5.6% in the 1950’s to over 12% in the 1980’s. Ms. Welter’s book, Trademark Surveys, published in 1998 by West Group, is an excellent source of information on how to utilize surveys in trademark litigation.

Measure of damages :

Both the Lanham Act and the common law provide for two standard methods of calculating damages, if indeed damages are awarded at all. These are typically the plaintiff’s lost profits or defendant’s profits gained as a result of defendant’s infringing activity. Additionally, damages have been based on a reasonable royalty or a the cost of corrective advertising. Finally, the court may award treble damages and prejudgment interest to the plaintiff where the court deems such damages as equitable and not punitive.

Misdescriptive marks (deceptively misdescriptive) :

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.

Misspelled words as marks :

Often business owners choose misspelled words that are phonetically similar to the correctly spelled word, in hopes of adding distinctiveness, or even perhaps as a marketing ploy. However, trademark law deems words that are misspelled, but otherwise descriptive of a product to be the same as the non-misspelled descriptive term for that product. For instance, “KUIK LOVEE” as a trademark for a convenience food item would be treated as a descriptive term in the same way as if the item were instead named “QUICK LOVE.”

Misuse of trademark :

An affirmative defense to trademark infringement. Misuse occurs when the trademark owner uses the mark in violation of the law, such as canceling a trademark license on the basis of illegal discrimination. Some legal scholars have also suggested that the misuse of a trademark should result in cancellation of a trademark registration where the trademark holder uses the registration to invoke Internic’s domain dispute policy when there is no valid argument for actual trademark infringement by the domain name owner. However, the US Patent and Trademark Office has never canceled a mark yet based on trademark use. Nonetheless, cancellation of patents and copyrights have occurred based on misuse, and it may be a matter of time before a similar precedent is set in trademark law.

Monetary relief :

Monetary relief is but one form of protection available to trademark owners under the Lanham Act. Monetary relief may include provable damages, attorneys fees, corrective advertising costs, lost profits (either defendants’ or plaintiffs’), prejudgment interest, punitive damages, reasonable royalty or treble damages. Monetary awards are not required when infringement has occurred. The court has wide discretion under “principles of equity” to grant or deny such relief, and frequently requires a finding of intentional infringement before making such a reward.

Monopoly :

A privilege vested in one or more parties consisting of the exclusive right to carry on a particular business or trade. In the case of trademark law, a monopoly specifically references the exclusive right to use a word, symbol, sound or trade dress, etc. in association with a particular kind of good or service.

Multiple-class application :
An application for Federal trademark registration in which the applicant seeks registration for more than one international class. The registrant must pay an additional registration fee ($245) for each class applied for.

Music, trademark protection of :

Trademark protection exists for any sounds or musical compositions to the extent that such music meets the requirements of a trademark. A famous example is the melody to “Sweat Georgia Brown” for the Harlem Globetrotters International.

Musical notation, trademark protection of :

Musical notes appearing with or without a staff are protected as long as they function as proper trademarks. As such, there is arguably no independent trademark protection against the printing of musical notes as a symbol identifying the specific song communicated by those notes, because they describe the music itself. Moreover, such notation would arguably be functional for the creation of that particular music. However, musical notation as a symbol for anything other than the song itself could operate as a trademark.

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