Businesses rely on trademarks to succeed in the social media-heavy marketplace. We instantly think of a company’s logo or slogan because the company has created a distinct trademark. Companies use trademarks consistently to increase their marketing success. Businesses can protect their intellectual property by registering their logo image or slogan. When another company uses your trademark to its economic advantage, you can file a lawsuit against them for trademark infringement. Understanding the basics of trademark infringement can help you no more about your legal options as you move forward to protect your intellectual property.
Understanding What a Trademark is and How it Can Be Infringed Upon
According to the U.S. Patent and Trademark Office, a trademark is “a word, phrase, symbol or design that identifies your goods and services.” A Trademark infringement is the unauthorized use of a trademark in connection with a good or service. Infringing on a trademark means using someone else’s trademark to sell a product or service in a way that could cause deception, confusion, or a mistake about the source of the goods or services. The following intellectual property can be trademarked:
- Product names and nicknames
- Business names
- Distinct sounds
- Logos
- Color combination schemes
- Slogans
Obtaining a Federal Trademark Provides the Best Protection
When a business uses a logo or slogan as part of its business, it will have a limited amount of trademark protection. These trademarks are called “common law trademarks” and allow business owners to enforce and protect their trademarks, but only in their immediate geographic locality. While it is possible to obtain trademark protection by registering your trademark with your state, registering it through the federal USPTO is the most secure and far-reaching protection.
When a business successfully registers a trademark with the USPTO, it will create a public record of the trademark owner. Additionally, other people will no longer be allowed to register trademarks that are deceptively similar to your trademark. It will also give businesses the right to bring a lawsuit against a person or company infringing upon their trademark in federal court. It can also be used to stop the import of goods into the United States that infringe on the trademark.
Requirements to Obtain a Federal Trademark
To obtain a federal trademark, you will need to submit an application and me all the relevant requirements. The mark for which you are seeking a trademark needs to be distinctive. It must be capable of identifying the source of a particular product. Courts used four different categories to determine whether a mark is distinctive enough to be trademarked based on the relationship between the mark and the product it represents. The requirements for legal protection that can be afforded to a trademark depending on the category under which it falls:
- Arbitrary or fanciful
- Suggestive
- Descriptive
- Generic
Arbitrary Trademarks
An arbitrary or fanciful mark, there is no logical relationship to the underlying product. For example, the word ‘Apple’ needs to have a logical relationship to the underlying phones, laptops, and other products the company sells. Similarly, the famous Nike “swoosh mark” does not have a logical relationship with athletic shoes. These are two examples of arbitrary or fanciful marks distinctive from the product they represent. Arbitrary marks are given a high degree of protection.
Suggestive Marks
Suggestive marks suggest a characteristic of the underline product they represent. Consumers need to exercise imagination to associate the word with the underline product. However, with suggestive marks, the underline product is somewhat distinctive from the mark.
Descriptive Marks
Descriptive marks directly describe a quality or characteristic of the underline product. For example, a descriptive mark may include an ingredient, function, dimension, order, or color related to the underline product. For example, Walmart includes the term “mart,” which describes a shopping center. Descriptive marks tell something about the product add are not inherently distinctive. Obtaining and enforcing a descriptive trademark can be more challenging than arbitrary and suggestive trademarks. To enforce a descriptive mark, you must prove that the terms are useful for describing the underline product. Doing so involves showing that the descriptive mark has acquired a secondary meaning, an additional hurdle you will need to clear.
Descriptive marks only acquire secondary meaning when the consumer associates the mark with a specific producer, not an underline product. For example, the term Holiday Inn has met the burden of acquiring a secondary meaning. The consuming public associates the term holiday with a specific hotel services provider, not the hotel services industry. The consuming public must be able to identify that the product or service comes from a single producer, even if they cannot identify the specific producer. When enforcing descriptive trademarks, courts will look at the following factors to determine whether the term has acquired secondary meaning or not:
- The amount and manner of advertising
- The volume of sales
- The length and manner of the term’s use
- Results of consumer surveys
Generic Marks
A generic trademark describes a general category to which the product belongs. For example, a cell phone is a generic term for multiple types of cell phones. Generic marks are not entitled to any protection under US trademark law. A company selling a product called cell phones would never have an exclusive right to use that term because giving a single manufacturer control would give it too much of a competitive advantage. You can include generic terms in your trademark, but you will need to ensure a secondary meaning to meet the requirement of a descriptive mark and enforce your rights.
Acquiring Trademark Rights
Assuming that your trademark meets the requirements set forth above and qualifies for protection, you will need to take action to protect your trademark. There are two ways a business can acquire trademark protection. First, they can be the first to use the mark in commerce. Additionally, they can be the first to register the mark with the USPTO.
Remember that descriptive marks only qualify for protection if they have acquired secondary meaning. If you are trying to protect and defend against infringement for a descriptive mark, there may be a period after the initial use of your mark in commerce before it acquires secondary meaning. During this transition time, your trademark may not be entitled to enforcement as trademark protection only kicks in once it has achieved a second meaning.
What if I Have Not Registered My Trademark Yet?
Registering your trademark through the federal USPTO is the best way to protect it. However, if you have not registered your trademark with the USPTO, you may still be able to enforce your trademark rights and protect against infringement. You will need to prove that you were the first to use the trademark in commerce. You will need to show that you sold a product to the public with the trademark attached to the product. The company that has sold a product with a trademark attached has the right to enforce trademark laws. This type of common law trademark enforcement is only recognized in the geographic area where you have been selling the product. In other words, if you sell a product called Huntington Pizza in Huntington Beach, you can force your trademark in that geographic area. You would not be able to enforce your trademark against a company selling Huntington Pizza on the East Coast. In short, you may still have some protection if you haven’t registered your trademark, but your ability to protect your infringement against infringement will be limited.
How to Know if Your Trademark is Being Infringed Upon
Trademark infringement is the unauthorized or illegal use of someone else’s registered trademark. Trademark infringement happens when end infringing trademark is substantially identical or deceptively similar to your registered trademark. When making a trademark infringement claim, you will need to demonstrate specific ways in which the two trademarks are similar. You will need to choose one category to prove whether it is that the trademark is substantially identical or deceptively similar.
To prove that the infringing trademark is substantially identical, you will need to show that the infringer copied the whole or substantial part of your registered trademark. Doing so will involve putting the trademark side-by-side and comparing them. Alternatively, if you choose to prove that the infringing trademark is deceptively similar, you will need to prove the following:
- A person of ordinary intelligence and memory
- Would experience the same impression upon recalling both trademarks
Impression involves a person’s memory regarding trademark features. In other words, how likely is an average person to confuse these two goods or services based exclusively on their trademarks? Finally, you will need to show that the infringing trademark has been used for an identical or similar judge, which will involve considering the following:
- The origins, purpose, nature, and characteristics of the goods/service
- Whether the goods/services are usually provided by one person or business
- Whether the same sources provide the goods/services in the same area
- Whether the goods/services are regarded as the same by those who provide them
What to Do if Your Trademark Has Been Infringed Upon
You will need to act quickly if your trademark has been infringed upon. Once you have identified who is infringing on your trademark, working with an attorney can help you efficiently resolve the trademark infringement. Doing so is the most efficient way to protect your interest and handle any potential issues that come up on the way. An attorney can guide you through the steps you will need to take to stop trademark infringement.
Send a Cease and Desist Letter
The first step you need to take is to send a cease-and-desist letter. If you cannot identify the company infringing upon your trademark, an attorney can help you gather information and try to identify the offender. The cease-and-desist letter notifies the infringer that you know they are infringing on your trademark in your rights. It will set forth the infringement that has already happened and allow you to state your demands moving forward. The cease-and-desist letter should include a deadline for the infringer to stop using your trademark.
Report the Infringement to the USPTO
The next step is to report the trademark infringement to the USPTO. If the infringing party has already submitted an application to the USPTO for their identical or nearly identical trademark, you have the right to file a Notice of Opposition. The Notice of Opposition informs the infringer that you intend to challenge their trademark by saying it is substantially similar or identical to your trademark. You must file the notice during the 30-day publication period.
File a Lawsuit
If the cease-and-desist letter does not stop the infringer, you have the right to pursue a lawsuit. Lawsuits can be costly and time-consuming, so they are usually the last step in enforcing that a business is right. However, a lawsuit can be necessary if the infringer ignores the original cease-and-desist letter. An attorney can help you decide whether you should file a lawsuit in state or federal court. You may be able to resolve the case out of court, but if not, your case will proceed to trial. If the court resolves the issue in your favor, the infringement will stop, and you may be able to r receive attorneys’ fees and costs and other compensation from the infringer.
Can I Lose My Right to Protect My Trademark?
Yes, you can lose your trademark rights, even after registering your trademark through the USPTO. You can lose your trademark in three main ways — improper licensing or assignment, abandonment, or generosity. Abandoning a trademark involves a company discontinuing its use with an intent not to resume its use. Not using the trademark for three consecutive years is prima facie evidence that the trademark has been abandoned. Generally, trademark law will only protect trademarks actively used in commerce.
Trademark rights can also be lost when a business engages in improper licensing or assignment. For example, suppose a business licenses a trademark to a franchisee without adequate quality control or supervision. In that case, the trademark could be canceled. Additionally, courts may find that the trademark has been canceled when the rights to a trademark are assigned to another business without the corresponding sale of an asset. In these cases, the trademark no longer identifies the goods of a particular provider.
Finally, trademarks can be lost due to generosity. A trademark that was originally distinctive in nature can become generic as time goes on. When a trademark becomes generic, the owner can no longer enforce the trademark against infringement. A trademarked word or phrase will become generic when the word denotes a broad type of product, not a specific manufacturer or source in the minds of most of the public.
Damages Available in a Federal Trademark Infringement Lawsuit
If someone has infringed on your trademark, you may have lost significant profits. You may be weighing the cost of bringing a trademark infringement claim and federal court versus how much compensation you may be able to recover as damages realistically. It is important to understand what types of damage are available under the Lanham Act, which governs federal trademark infringement lawsuits. Under the Lanham Act, there are three categories of damages courts may award to successful plaintiffs:
- Actual damages
- Disgorgement of the Infringer’s Profits, and
- Attorney’s fees and costs
Actual Damages
Successful plaintiffs in trademark infringement lawsuits can pursue compensation for their actual damages. In order to recover actual damages, the plaintiff must prove actual customer confusion. In other words, the plaintiff must prove that customers have actually been confused by the trademark infringement, resulting in them not purchasing the plaintiff’s products. This heightened burden of proof can make it challenging to prove the likelihood of consumer confusion. There are several ways in which courts measure actual damages. Federal judges have the discretion to determine the best way to measure actual damages on a case-by-case basis.
In order to prove actual damages, you should keep careful records related to how many customers are confused by the trademark. For example, if your business has received calls from consumers who believe you are the same company as a competitor using your trademark, keep records of all of the customer’s phone calls.
Lost Profits
Another way to prove actual damages includes proving lost profits that the plaintiff would have realized had the defendant not engaged in trademark infringement. As the plaintiff, you will need to show that specific revenue amounts could have been realized by your business but were not because of the trademark infringement. You can also recover damages for the loss of goodwill you have experienced because consumers associate your quality goods and services with your competitor who was wrongly using your trademark. These damages are measured by assessing the value of your trademark before infringement and after the infringement.
Corrective Advertising
Many victims of trademark infringement are required to take out advertising to try to mitigate the impact of the defendant’s infringing activities. Plaintiffs can pursue compensation for all the advertising and marketing they have had to purchase to clear up confusion related to the trademark and their products and services. Generally, to obtain these types of damages, the plaintiff needs to show that the plaintiff and defendant are directly competing in the same marketplace.
Reasonable Royalty
Federal courts can also award actual damages to the plaintiff through a trademark license fee. This amount constitutes the licensing fee the defendant should have paid to the defendant instead of infringing on the plaintiff’s trademark without permission. Some federal courts will require the plaintiff to prove that there was an existing licensing agreement. Other courts will consider a hypothetical negotiation between the plaintiff and the defendant over a trademark license and extrapolate the value of reasonable royalties.
Enhanced Damages
Courts may award enhanced damages depending on the circumstances of the particular case. Enhanced damages can include up to treble the amount of actual damages the plaintiff proves. When actual damages have been difficult to calculate, and courts perceive that the plaintiff might be under-compensated for their damages, they may require a reasonable royalty payment as appropriate compensation for the trademark infringement.
Disgorgement of Profits
The plaintiff can pursue damages for discouraging the infringing party’s profits. When the defendant’s Infringement increases their profits, the infringed upon party can pursue damages for those profits. Disgorgement of profits is considered an equitable remedy. It will require a careful accounting of the defendant’s profits that resulted from infringing on the plaintiff’s trademarks. The purpose of this type of remedy is to stop the defendant from unfairly benefiting or being unjustly and wrist from the infringement. Once the plaintiff has established the defendant’s gross revenues, the burden shifts to the defendant to challenge the plaintiff’s evidence. Some courts may require the plaintiff to show that the defendant’s infringement was willful to obtain these types of damages.
Attorney’s Fees and Costs
Under the Lanham Act, a plaintiff can pursue reasonable attorney fees and costs, but only in exceptional cases. Exceptional cases usually include deliberate, willful, fraudulent, or malicious infringement. Federal courts have also awarded attorneys fees and costs to successful defendants. Defendants must show that the plaintiff brought a faceless or frivolous lawsuit or employed depressive litigation tactics when defending their trademark.
Contact a Intellectual Property Attorney
Trademark infringement hurts businesses regarding profit margins, marketing, and brand identification. If your trademark has been infringed upon, the skilled attorneys atAU LLC are here to help. We will carefully review your case and help you understand whether pursuing a trademark infringement lawsuit may be beneficial. A carefully drafted demand letter could help you resolve your issue. In other cases, you may need to pursue more aggressive tactics, including litigation.
The attorneys atAU LLC have a proven track record of representing clients in trademark infringement cases across the country. We always keep our clients’ goals and needs in mind when providing effective legal counsel. Contact us today to schedule your initial consultation and learn more about how we can protect your intellectual property aggressively.