Business Torts

Dilution by tarnishment

an association arising from the similarity between a mark or trade name and a famous mark that harms the reputation of the famous mark

Doctrine of foreign equivalents

consider the meaning of a mark in a non-English language to the speakers of that language 1. Translate any foreign term into English if it is not an obscure or dead language 2. Assess the implications of connecting that English term with the associated goods or services

Family of marks

groups of marks that are promoted together so that the public associates that common characteristic with the same owner

Intent to use app

priority rights are dated back to the date of the app filing (not the date of actual use in commerce) --> creates constructive use

Commercial speech

protected under the 1st Am if not false or misleading, but its level of protection is somewhat lower than that for noncommercial speech Test for determining whether a particular commercial speech regulation is constitutionally permissible: Does the commercial speech concern unlawful activity or is it misleading ? YES --> the speech is not protected by the 1st Am NO --> Is the asserted governmental interest is substantial? YES --> Does the regulation directly advance the governmental interest asserted? Is it more extensive than is necessary to serve that interest? If speech is not "purely commercial" (if it does more than propose a commercial transaction) then it is entitled to full 1st Am protection

Actual use app process

1. Application 2. Examination 3. Publication in the PTO's Official Gazette 4. Opposition 5. Registration

Intent to use app process:

1. Application 2. Examination 3. Publication in the PTO's Official Gazette 4. Opposition a. The issuance by the PTO of a "Notice of Allowance" b. The filing by the applicant of a Statement to Use 5. Registration

Law of Use

1. Common law --> must have actual use 2. Registration --> must have use in commerce

Types of confusion

1. Confusion as to Source or Sponsorship (most common) 2. Initial Interest Confusion By the time you reach the point of sale, the purchaser is not confused and knows they are looking at a different source of product So what is the harm? --> your initial interest was in one source, but you settle for another when what you are seeking is not available 3. Post-Sale Confusion Consumer does not confuse two products but, because of similarities in design, third parties who see the product from afar will assume that the products are the same 4. Reverse Confusion A large company adopts the mark of a smaller trademark owner Senior user is a smaller company and junior user is a larger company and overwhelms the marketplace 5. Passing Off D passes off their product under someone else's more established trademark 6. Reverse Passing Off Taking someone else's product and sticking your trademark on it

Defenses to blurring

1. D's fair use 2. News reporting and commentary 3. Noncommercial use

PTO's test for "disparaging" marks

1. Determine the likely meaning of the matter in question 2. If that likely meaning is found to refer to identifiable persons, institutions, beliefs, or national symbols, determine whether this likely meaning would be perceived as disparaging by a substantial composite of the referenced group (in light of contemporary attitudes)

PTO's test for "scandalous" marks

1. Determine the likely meaning of the matter in question Typically by reference to dictionary definitions, media usages, advertising, and the nature of the good/service to which the mark is affixed 2. Determine whether the likely meaning of the matter in question would be perceived as scandalous by a substantial composite of the general public at the time the registration of the matter is sought (in the context of contemporary attitudes) a. Substantial composite is unclear, but it's not necessarily a majority b. General public c. Contemporary attitudes

Tests to determine whether something is descriptive

1. Dictionary definition 2. Imagination test (suggestiveness test) --> does it sound more suggestive than descriptive? 3. Whether competitors would find the term useful to describe their product 4. Whether competitors have used the phrase to describe their product

Establishing trademark rights

1. Do they have a mark? 2. Is the mark source identifying? 3. Do they have priority of use?

False Advertising under Lanham

1. False & misleading a. Literal falsity --> express statement that is untrue on its face b. Literal falsity by necessary implication --> if the words or images, considered in context, necessarily imply a false message c. Implicit falsity --> while true on its face, needs qualification or clarification to prevent it from being misleading to consumers 2. Representation a. Fact (actionable ) --> capable of being proven true or false b. Opinion (usually not actionable) --> exceptions: if you can interpret that opinion as having a statement of fact or implying a fact, those facts are actionable if they are false c. Puffery (never actionable) --> general assertion of superiority or exaggerated blustering; trust or falsity cannot be precisely determined d. Establishment claims 3. About the product --> about its nature, characteristics, quality, or geographic origin 4. D's goods --> you said something false about your goods 5. In commercial advertising or promotion Four elements: a. Commercial speech; b. By a D who is in commercial competition with P; c. For the purpose of influencing consumers to buy D's goods or services; and d. Disseminated sufficiently to the relevant purchasing public to constitute "advertising" or "promotion" within that industry 6. Actually deceived or tended to deceive a substantial segment of the intended audience 7. Materiality --> would likely influence consumer purchasing decisions 8. Interstate commerce 9. Injury to P

Elements of dilution

1. Famous mark; 2. Began using famous mark prior to other's first use; 3. Using famous mark in commerce; and 4. Have dilution by blurring OR tarnishment

Elements of "geographically deceptively misdescriptive" marks

1. Geographic The primary significance of the mark is a generally known geographic location; 2. Goods-place connection is likely to deceive consumers A substantial portion of relevant consumers would be likely to believe incorrectly that the mark is an accurate description of the origin or other association of the goods with the geographic location 3. Materiality The misdescription would materially affect the public's decision to purchase the goods Because of In re Spirits, the PTO has updated the elements of geographically deceptively misdescriptive (§ 2 e3): 1. The primary significance of the mark is a generally known geographic location 2. The goods or services do not originate in the place identified in the mark 3. Purchasers would be likely to believe that the goods or services originate in the geographic place identified in the mark 4. The misrepresentation would be a material factor in a significant portion of the relevant consumers' decision to buy the goods or use the services

A term is geographically descriptive if

1. Its primary significance is a generally known geographic location (rather than an obscure locale that happens to have as its name the term sought to be registered); 2. The goods or services originate in that geographic location; and 3. Purchasers would be likely to believe that the goods originate from that location

Trademark § 45

1. Mark must be a word, name, symbol, or device, or any combination thereof 2. Priority of use "Used by a person *or* which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act" 3. Source Identifying (Distinctive) "To identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown."

Test for "deceptively misdescriptive"

1. Misdescription 2. Likely to deceive 3. Misdescriptiveness is not material to their purchasing decision Note: deceptively misdescriptive are protectable if distinctive

Test for "deceptiveness"

1. Misdescription Is the term misdescriptive of the character, quality, function, composition, or use of the goods? 2. Likely to deceive If so, are prospective purchasers likely to believe that the misdescription actually describes the goods? 3. Likely to influence purchasers into buying If so, is the misdescription likely to materially affect the decision to purchase? Note: deceptive marks are barred from registration even if secondary meaning

Classic Fair Use

1. Not used as a trademark --> non-trademark holder is using the trademark not as a trademark, 2. In fairly and in good faith, and 3. Only to describe its goods or services

Common law commercial disparagement

1. Publication (communication) by D 2. Disparaging words 3. Characteristic --> of and concerning the ownership, quality, or other characteristics of the P's goods, services, or property 4. False 5. Publisher intended for publication to result in harm of a pecuniary nature 6. Special damages 7. (some courts) P must demonstrate ill will, malice --> D knew the statement was false or acted with reckless disregard to the falsity

Factors to consider in determining whether a mark is primarily merely a "surname"

1. Rareness The degree of the surname's "rareness" 2. Applicant's surname use Whether anyone connected with applicant has the mark as a surname 3. Other meanings Whether the mark has any recognized meaning other than as a surname 4. Look and feel Whether the mark has the "look and feel" of a surname (subjective) 5. Whether the manner in which the mark is displayed might negate any surname significance (subjective) Note: not all factors have to be considered; some factors may be irrelevant If there is any doubt, applicant trying to register a surname wins.

Likelihood of Confusion factors from Polaroid

1. Strength of the P's mark; a. Inherent distinctiveness b. Acquired distinctiveness c. Third party marks (existence of which lessens P's claim) 2. Similarity of the marks; a. Look at the sight, sound, and meaning of both marks and compare them 3. Proximity of the products sold under the marks (how similar the goods are); a. Channels of trade --> how are the products sold? Are they sold at a retailer, through specialty stores, etc? 4. Likelihood that P will sell the products being sold by D (bridging the gap); a. Expanding product lines --> is this the kind of product that P is likely to expand into selling? 5. Existence of actual confusion among consumers; a. Don't have to have it, but if you do it's a strong argument for you b. Most cases involve ITUs so you can't have actual confusion 6. Sophistication of consumers a. What type of buyer is the reasonable purchaser of the product? b. Cost of the good (the more costly, the more sophisticated and careful the purchaser is likely to be) 7. Bad faith a. If the D is a sophisticated party and had the intent to create the likelihood of confusion to ride the coattails of another company b. The lack of bad faith is not relevant, but evidence of bad faith is relevant 8. Quality of D's services and products a. This tells us how much harm there will be to P if there is a likelihood of confusion Note: not all the Polaroid factors have to be met; none of the factors are dispositive; some factors are more important than others; some may be irrelevant

Test for determining whether a mark should be refused registration because it falsely suggests a connection with a famous living person

1. The mark must be shown to be the same as or a close approximation of the person's previously used name of identity 2. It must be established that the mark (or part of it) would be recognized as such 3. It must be shown that the person in question is not connected with the goods or services of the applicant 4. The person's name or identity must be of sufficient fame that when it is used as part or all of the mark on applicant's goods, a connection with that person is likely to be made by someone considering purchasing the goods

Priority of use

1. Timing --> am I the first one to use this mark in connection with this good/service? 2. Location --> what geographic scope this particular use gives you priority in Trademarks are a very limited property right It's possible for two different companies to use the same mark in different parts of the country as long as it doesn't create consumer confusion

Major League Baseball

Abandonment FACTS --> P, owner of LA Dodgers, who used to play in Brooklyn, had been granted the exclusive right to the trademark LA Dodgers. D opened a restaurant in Brooklyn called "The Brooklyn Dodger Sports Bar & Restaurant." ISSUE --> Whether D's use in its restaurant business of the P's trademark violated P's trademark rights? --> NO RULE --> A mark shall be deemed abandoned when its use has been discontinued with intent not to resume (§ 1127) Intent not to resume can be inferred from circumstances Burden of proving abandonment falls upon the party seeking cancellation of a registered mark because a certificate of registration is prima facie evidence of the validity of the registration and continued use HOLDING --> "Brooklyn Dodgers" mark was abandoned by P

Refused registration (§ 2)

Barred unless distinctive: Descriptive Deceptively misdescriptive Geographically descriptive Surname Barred even if distinctive: Immoral, deceptive, scandalous, disparaging Flag, coat of arms, other insignia Name/portrait of living person (unless have consent) Name/portrait of president (unless have widow's consent) Likely to confuse Geographically deceptively misdescriptive Functional

Qualitex

Color can be Trademark if Secondary Meaning FACTS --> Qualitex registered a color as a trademark. They used a special shade of green-gold for press pads that it sold to dry cleaning firms. Another company began to use the same color. ISSUE --> Can color be a trademark? --> YES IF it has acquired secondary meaning and therefore identifies and distinguishes a particular brand Over time, customers may come to treat a particular color as signifying a brand to the extent that it develops a secondary meaning. If other colors are not available for similar use by competitors (colors become scarce), the functionality doctrine is available to prevent problems. DISCUSSION --> The Lanham Act is broadly construed and so can include within its scope almost anything. The court focuses on what the color represents and how it is viewed by consumers, rather than on its status as a color.

TrafFix

Functionality FACTS --> Upon expiration of respondent's patents for a dual-spring mechanism to permit signs to withstand strong winds, petitioner copied the design and marketed its own sign stands. ISSUE --> Is the dual-spring mechanism protectable? --> NO because it is functional; the springs are essential to the use of the device & affect the cost and TrafFix failed to prove non-functionality Presumptions: A utility patent is strong evidence that the features therein claimed are functional (presumption of functionality) If registered, presumption that trademark is valid and nonfunctional Burden of proof Unregistered trade dress --> person seeking protection has the burden of proving that trade dress is not functional

Ely-Norris Safe Co

Common Law False Advertising FACTS --> P had a patent on explosive chambers in safes designed to protect against burglars. P alleged that D has infringed upon its patent and that D has sold safes without an explosive chamber and has falsely told customers that a band around the door of its safes was used to cover and close an explosion chamber. ISSUE --> Must a loss of business be shown in a suit for unfair competition? --> NO RULE --> A loss of business can be inferred in a suit for unfair competition. While a competitor may, generally speaking, take away all the customers of another that he can, there are means, which he must not use. One of these is deceit --> the false use of another's name as maker or source of his own goods is deceit HOLDING --> D's conduct was harmful to P; P could prove damages by inference because of P's patent. REASONING It is virtually impossible for P to prove that a customer that D procured by his deceit would have bought from P if D had been truthful. Exception --> single source If P has a monopoly of a product and to secure a customer, D must represent that he has the same type product, then there is a fair inference that the customer wants those and those only.

Big O Tire

Corrective Advertising ACTS --> P tire dealer used the term "Big Foot" to describe its private brand of tires. D tire manufacturer subsequently launched its own multi-million dollar "Bigfoot" advertising campaign. The jury awarded P compensatory and punitive damages upon a finding that D was liable for common-law trademark infringement and trademark disparagement. The district court permanently enjoined D from infringing the P's trademark. RULE --> Corrective advertising is supposed to correct people's conception of the goodwill It is most likely to occur where we have tarnishment or reverse confusion HOLDING --> Although the dealer could recover advertising expenses incurred to counteract the resulting public confusion, the court reduced the compensatory damages award because a dollar-for-dollar expenditure was unnecessary to dispel the effects of the confusing advertising.

Lindy Pen

Damages RULE --> Where trademark infringement is deliberate and willful, this court has found that a remedy no greater than an injunction "slights" the public. This standard applies, however, only in those cases where the infringement is "willfully calculated to exploit the advantage of an established mark." Accounting of profits is only proper where there is willful infringement (deliberate intent to deceive). An accounting is intended to award profits only on sales that are attributable to the infringing conduct HOLDING --> Appellants were unable or unwilling to present competent evidence to satisfy their burden of demonstrating lost profits or of unjust enrichment from the infringement and also failed to provide evidence sufficient to merit an accounting of profits including any evidence of infringing market sales

Zatarain's

Descriptive FACTS --> Zatarain's has used the term "Fish-Fri" since 1950 and registered the term as a trademark in 1962. Zatarain's has used the term "Chick-Fri" since 1968 and registered the term as a trademark in 1976. Two other companies market coatings for fried foods that are denominated "fish fry" or "chicken fry." ISSUE --> Is "Fish-Fri" protectable? --> NO, though it is a descriptive term that has acquired secondary meaning, D has "fair use" defense "Fair Use" defense --> applies only to descriptive terms and requires that the term be used fairly and in good faith only to describe to users the goods or services of a party or their geographic origin Prevents a trademark registrant from appropriating a descriptive term for its own use to the exclusion of others, who may be prevented thereby from accurately describing their own goods Anyone is free to use a descriptive term in its primary, descriptive sense so long as such use does not lead to customer confusion as to the source of the goods or services If D is using P's trademark only to describe his products fairly and in good faith, D's use is allowed because its use is not source identifying ISSUE --> Is "Chick-Fri" protectable --> NO, it is a descriptive term without secondary meaning

Nike v. Nikepal

Dilution by Blurring FACTS --> A company uses the mark "NIKEPAL" on its trade name, lab products, website. Nike objects to the use. ISSUE --> Does the mark "NIKEPAL" dilute Nike? --> YES because NIKE is a famous mark and NIKEPAL dilutes it by blurring To prevail on its dilution claim, Nike must prove: 1. That its mark was famous as of a date prior to the first use of the NIKEPAL mark; and 2. That Nikepal's use of its allegedly diluting mark creates a likelihood of dilution by blurring or tarnishment

Accounting of profits

Entitles the P to D's profits from sales resulting from the wrongful use of an infringing mark D's sales are presumed to result from the wrongful use unless the D proves otherwise, and the gross revenue from sales is considered profit except for the actual costs of materials, production, and direct marketing expenses, or other justifiable deductions proved by D

Fashion Boutique

FACTS --> Fashion Boutique sues Fendi for unfair competition under §43(a) and for unfair competition and defamation under NY common law. Fashion Boutique alleges that D's employees made disparaging comments regarding the quality and authenticity of the goods sold by Fashion Boutique to consumers who visited D's store in NY. ISSUE --> Whether the allegedly disparaging statements by salespersons at the Fendi store constituted commercial advertising or promotion within the meaning of § 43(a)? --> NO RULE --> These false statements that are disparaging must be in the context of "advertising and promotion" Although advertising is generally understood to consist of widespread communication through print or broadcast media, promotion may take other forms of publicity used in the relevant industry, such as displays at trade shows and sales presentations to buyers The ordinary understanding of both "advertising" and "promotion" connotes activity designed to disseminate information to the public Thus, the touchstone of whether a D's actions may be considered commercial advertising or promotion under the Lanham Act is that the contested representations are part of an organized campaign to penetrate the relevant market Thus, businesses harmed by isolated disparaging statements do not have redress under the Lanham Act HOLDING --> Fashion Boutique failed to put forward sufficient evidence that D's actions constituted "commercial advertising or promotion" under the Lanham Act There is no evidence to suggest that the statements were part of an organized campaign to penetrate the marketplace Such evidence is insufficient to satisfy the requirement that representations be disseminated widely to constitute commercial advertising or promotion under the Act

Louis Vuitton v. Haute Diggity Dog

FACTS --> HDD manufactured toys on which dogs could chew and which parodied famous trademarks on luxury products, including those of LVM. ISSUE --> Is HDD diluting LVM's mark? --> NO because HDD's "CHEWY VUITON" marks are a successful parody so they will not dilute LVM (Parody is not a valid defense here, but it is relevant to the factors of dilution by blurring) To state a dilution claim under the TDRA, a P must show that: 1. P owns a famous mark that is distinctive; 2. D has commenced using a mark in commerce that allegedly is diluting the famous mark; 3. A similarity between D's mark and the famous mark gives rise to an association between the marks; and 4. The association is likely to impair the uniqueness of the famous mark or likely to harm the reputation of the famous mark

Proctor & Gamble

FACTS --> P sued D because D disseminated rumors that P was a corporate agent of Satan. Trial court granted summary judgment to D on the ground that D's message associating P with Satan did not relate to characteristics of P's products and was thus outside of the protections of § 43(a). ISSUE --> Whether the rumor-spreading constituted commercial speech? --> YES RULE --> In order for representations to constitute "commercial advertising or promotion" under Section 43(a)(1)(B), they must be: 1. Commercial speech; 2. By a D who is in commercial competition with P; 3. For the purpose of influencing consumers to buy D's goods or services; 4. Disseminated sufficiently to the relevant purchasing public to constitute "advertising" or "promotion" within that industry REASONING Although Congress did not define the term "commercial activities" in the Act, the plain language meaning of that term encompasses "commercial transactions" or all activities surrounding the peculiar "commerce" of a company, defined as "the exchange or buying and selling of commodities." The subject message linking P&G to Satan clearly concerned the nature, characteristics, or qualities of P&G's commercial activities, under the plain meaning of that phrase

Quality Inns v. McDonald's

FACTS --> Quality wanted to name their hotel "MCSLEEP INN." McDonald's obviously opposed. ISSUE --> Is "MCSLEEP INN" protectable? NO because it is likely to cause an appreciable number of the public to be confused by believing that McSleep Inn is sponsored, associated, affiliated, connected, or endorsed by McDonald's

KP Permanent Make-Up

Fair Use FACTS --> Both parties sells permanent make-up and both have used some version the term "micro color." ISSUE --> Whether a party raising the fair use defense has a burden to negate any likelihood that the practice complained of will confuse consumers about the origin of the goods offered? --> NO RULE --> Mere risk of confusion will not rule out fair use; fair use can occur with some degree of confusion Even when relying on an incontestable registration, the party charging infringement has the burden of proving likelihood of confusion (infringement) There is NO burden on the D to show non-confusion (only P has burden) HOLDING --> P claiming infringement of an incontestable mark must show likelihood of consumer confusion as part of the prima facie case D has no independent burden to negate the likelihood of any confusion in raising the affirmative defense that a term is used descriptively, not as a mark, fairly, and in good faith

Pizza Hut (fix after AK clarifies)

False Advertising FACTS --> P was a national pizza franchise. D was a competitor. D adopted the slogan: "Better Ingredients. Better Pizza." D launched its first national ad campaign. The campaign was directed towards P. The campaign was successful. D next launched a series of ads touting the results of a taste test in which consumers were asked to compare D's pizza and P's pizzas. Following the taste test ads, D ran ads comparing specific ingredients used in its pizzas with those used by its "competitors." In the ads, defendant touted the superiority of its sauce and its dough. P sued, claiming false advertising in violation of section 43(a)(1)(B). Trial jury rendered a verdict for P.

Time Warner ((fix after AK clarifies)

False Advertising FACTS --> There was no dispute that the high-definition (HD) services provided by P and D were equivalent in picture quality. The district court found that statements in the commercials made the literally false claim that D's HD was superior to P's HD in picture quality. HOLDING The statement in one ad that "it is impossible to obtain the best picture from any source other than DirecTV" is likely to be proven literally false. This claim is flatly untrue; the uncontroverted factual record establishes that viewers can, in fact, get the same "best picture" by ordering HD programming from their cable service provider The statement in another ad that "settling for cable would be illogical," considered in light of the ad as a whole, unambiguously made the false claim that cable's HD picture quality is inferior to that of DIRECTV's. Thus this statement is also literally false.

Murphy Bed Co

Generic FACTS --> P invented the Murphy Bed. PTO denied their app to register the Murphy bed trademark because the term had become generic. D began using the term for similar beds. ISSUE --> Is "Murphy Bed" generic? --> YES because it has been appropriated by the public to designate generally a type of bed and D met its burden of proof by adequately demonstrating that the Murphy bed mark is generic Genericide --> where the public is said to have expropriated a term established by a product developer Burden of proof with "genericide" --> burden on D to prove genericness because the term had been valid as a trademark Dictionary definitions are not conclusive proof of a mark's generic nature, but they are influential because they reflect the public's perception of a mark's meaning and implication

Filipino Yellow Pages

Generic FACTS --> Publisher of a telephone directory for the Filipino-American community calls it the "Filipino Yellow Pages." Other company also used the term. ISSUE --> Is the term "Filipino Yellow Pages" protectable? --> NO because it's generic Giving P exclusive rights would prevent any competitors from telling what its products are Who has the burden? Unregistered mark --> P has the burden to prove nongenericness Registered mark --> D has the burden to prove genericness (P's mark presumed valid) Test for genericness --> who are you/what are you (primary significance) test: A mark answers the question "who are you" The generic name of the product answers the question "what are you" If the primary significance of the trademark is to tell me what the product is rather than who the product is from, the trademark is a generic term and cannot be a valid trademark A composite term may become a protectable mark even though its components individually cannot Anti-dissection rule --> the validity and distinctiveness of a composite trademark is determined by viewing the trademark as a whole, as it appears in the marketplace (we are not supposed to dissect a trademark into its pieces)

Defense to commercial disparagement: privilege

If P proves all of the necessary elements, the burden shifts to the D to prove the existence of a privilege Some statements, such as statements made in court, are absolutely privileged from becoming the basis of a product disparagement claim: a. Product comparisons b. Rival claimant --> speaker assets that he, not the P, owns title to property; statement is privileged, even in unreasonable, as long as it is subjectively honest and in good faith c. Common interest --> the speaker reasonably believes that publication protects or furthers their common interest; and the publication is reasonable and in good faith d. Speaker's interest --> speaker has a sufficiently important interest; and he reasonably believes that publication protects or furthers that interest e. Recipient's interest --> speaker reasonably believes that information affects a sufficiently important interest of recipient; and the speaker has an obligation to inform recipient f. Fair comment

Park 'N Fly

Incontestability FACTS --> Park's mark "PARK 'N FLY" has been registered since 1969. Park's mark became incontestable in 1977. Dollar calls its business "Dollar Park and Fly." Dollar (1) sought cancellation of Park's mark on the grounds that it's generic and (2) claimed that Park's mark is unenforceable because it's descriptive without secondary meaning. ISSUE --> Is this incontestable mark unenforceable because it's descriptive without secondary meaning? --> NO because an incontestable mark may only be canceled on specified grounds, none of which include mere descriptiveness A mark may be cancelled on the grounds that it is merely descriptive only if the petition to cancel is filed within 5 years of the date of registration (before mark becomes incontestable)

Tiffany v. eBay

Indirect Infringement FACTS --> The eBay marketplace is sometimes employed by users as a means to perpetrate fraud by selling counterfeit goods. P Tiffany have created and cultivated a brand of jewelry bespeaking high-end quality and style. Based on Tiffany's concern that some use eBay's website to sell counterfeit Tiffany merchandise, Tiffany has instituted this action against eBay arising from eBay's advertising and listing practices. ISSUES: Whether eBay is liable for contributory trademark infringement? --> NO Whether eBay is liable under the Inwood test on the basis of the services it provided to those who used its website to sell counterfeit Tiffany products? --> NO HOLDING --> For contributory trademark infringement liability to lie, a service provider must have more than a general knowledge or reason to know that its service is being used to sell counterfeit goods. Such general knowledge is insufficient for eBay to take an affirmative duty. Some contemporary knowledge of which particular listings are infringing or will infringe in the future is necessary. Tiffany failed to demonstrate that eBay was supplying its service to individuals who it knew or had reason to know were selling counterfeit Tiffany goods.

What kind of use do you need for federal registration?

Interstate use or intrastate use with interstate effects (Commerce Clause) Intracompany sales are usually not enough Interstate shipment may be enough if it's public enough that the public can make the connection Token use is not enough

Virgin Enterprises

Likelihood of Confusion FACTS --> VEL owns the incontestable mark "VIRGIN" for use in connection with retail computer and electronic apparatus stores. It operates Virgin Megastores that sell a variety of electronic apparatus, including video game systems, CD players, disposable cameras, and DVD players. D started selling cell phones under the mark "VIRGIN." ISSUE --> Is VEL's "VIRGIN" mark protectable? --> YES because of its prior use and ownership Is D's use of "VIRGIN" for stores selling wireless phones likely to cause confusion? --> YES because P's mark was strong, the marks were similar, and the proximity of the products were likely to cause confusion (easy leap from consumer electronics to cell phones)

Corrective advertising

Money for future corrective advertising to remedy confusion or repair damaged goodwill, often based on a percentage of defendant's expenditures, may be awarded in appropriate cases

Common law false advertising

Most common law false advertising cases are unsuccessful If you can prove your damages, you can sue Generally, competitor cannot prove its damages and thus has no action You cannot have a false advertising claim unless you prove harm Most of the time, you cannot prove the harm Exception: single source --> if the thing you are claiming is false is a characteristic or quality that you have a monopoly on, then there is an inference of a loss of business (harm)

Spectrum of Distinctiveness

Most protected to least protected: 1. Fanciful/coined 2. Arbitrary 3. Suggestive 4. Descriptive 5. Generic

Dawn Donut (dissent)

Naked Licensing (licensing w/o quality control) FACTS --> P was a wholesale distributor of donuts. D used P's trademark fo the sale of its donuts and baked foods. P sued. D's defense was to cancel P's registrations on the that P had abandoned its trademark due to inadequate quality control and supervision of its licenses. ISSUE --> Whether P excercised sufficient control in policing and inspecting its licensees' operations to guarantee the quality of the products they sold under its trademarks to the public? --> NO RULE --> the Act places an affirmative duty upon a licensor of a registered trademark to take reasonable measures to detect and prevent misleading uses of his mark by his licensees or suffer cancellation of his federal registration Controlled licensing does not work an abandonment of the licensor's registration, while a system of naked licensing does

Advantages of registration

Nationwide constructive use and constructive notice (cuts off rights of other users of the same or similar marks) The possibility of achieving incontestable status after five years (greatly enhances rights by eliminating a number of defenses) A prima facie presumption of the validity of the mark and the registrant's ownership of the mark

Damages

P are entitled to recover (1) D's profits, (2) any damages sustained by P, and (3) the costs of the action Any damages sustained by P: P must prove both the fact and the amount of damage Damages are typically measured by any direct injury which a P can prove, as well as any lost profits which P would have earned but for the infringement Because proof of actual damage is often difficult, a court may award damages based on D's profits on the theory of unjust enrichment Damages must be established with reasonable certainty Damages are not rendered uncertain because they cannot be calculated with absolute exactness, yet, a reasonable basis for computation must exist Attorney's fees are only awarded in "exceptional circumstances" --> when the infringement is malicious, fraudulent, deliberate, or willful

Mattel

Parody FACTS --> D had marketed a song entitled "Barbie Girl" by the Danish group Aqua, which pokes fun at Barbie and the values that Aqua contends she represents RULE --> Rogers balancing test --> a literary title does not violate the Lanham Act unless it has no artistic relevance to the underlying work whatsoever, or, if it has some underlying artistic relevance, unless the title explicitly misleads as to the source or content of the work HOLDING --> Barbie Girl was a parody of Barbie under fair use and not likely to confuse Mattel's consumers Barbie Girl was not purely commercial speech and thus was fully protected The title "Barbie Girl" had artistic relevance to the song, and was not explicitly misleading

Samara Bros

Product Design Protectable if Secondary Meaning FACTS --> Wal-Mart sold "knock-offs" of Samara's children's clothing. ISSUE --> Is product design protectable? --> YES IF it has secondary meaning Like color, product design is NOT inherently distinctive Consumers are aware that even the most unusual of product designs is intended not to identify the source, but to render the product itself more useful or more appealing Policy justification for ruling: concern with small companies bringing frivolous lawsuits Scalia --> the fact that product design serves purposes other than source identification not only renders inherent distinctiveness problematic; it also renders application of an inherent-distinctiveness principle more harmful to other consumer interests Consumers should not be deprived of the benefits of competition with regard to the utilitarian and esthetic purposes that product design ordinarily serves by a rule of law that facilitates plausible threats of suit against new entrants based upon alleged inherent distinctiveness

Licensing

To validly license a trademark, the licensor must control the nature and quality of the licensee's goods or services in connection with which the mark is used. The critical question is whether P sufficiently policed and inspected its licensees' operations to guarantee the quality of the products they sold under its trademarks to the public. The license agreement should identify: a. Mark or other means for trade identity involved, b. Goods or services in connection with which it is to be used, c. Standards of quality for the goods or services, d. Methods of supervision and control, e. Any limitations on territory, sublicensing, or the sale of competing goods, f. Time period or duration of the license and reversion of all rights after termination, and g. Termination of rights of both parties for breach of the license agreement

Taco Cabana

Trade Dress Protectable if Distinctive FACTS --> Two Pesos adopted a motif very similar to Taco Cabana's trade dress. TC sued them for infringement. ISSUE --> Is trade dress protectable? --> YES IF it is nonfunctional and distinctive (either inherent or acquired through secondary meaning) Here, trade dress is inherently distinctive so there is no requirement of showing secondary meaning Inherently distinctive --> it can automatically service as a source identifier Secondary meaning --> over time it becomes a source identifier Policy justifications for ruling: Protecting distinctive trade dress will enable companies to appropriate their own goodwill Small companies may be unable to protect their trade dress from larger infringers if they are required to establish secondary meaning White --> Denying protection for inherently distinctive nonfunctional trade dress until after secondary meaning has been established would allow a competitor, which has not adopted a distinctive trade dress of its own, to appropriate the originator's dress in other markets and to deter the originator from expanding into and competing in these areas

Zazu

Trademark Rights FACTS --> ZHD, a hair salon, had plans to market hair products under "ZAZU." They hired chemists and sold a few bottles to friends. L'Oreal beat them to it by heavily marketing and selling hair color under the mark "ZAZU." ISSUE --> Is ZHD's few sales of its products sufficient use to establish priority over L'Oreal? --> NO because a few bottles sold over the counter and a few mailed to friends in other states, neither link the ZAZU mark with ZHD's product in the minds of consumers nor put other producers on notice To prevail, ZHD needs to establish trademark rights 1. Do they have a mark --> YES 2. Is it source identifying --> YES 3. Can they use their state registration of a tradename to establish their priority in a trademark or service mark --> NO because cannot establish priority of use, unless there is actual use Common law use --> insufficient "Use" meant sales to the public of a product with the mark attached Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated Post-Lanham use --> insufficient You cannot have minimal or token use and have that be sufficient to serve as the basis for a use application DISSENT --> AK thinks dissent is right about the product connection with salon services A service mark can be infringed by its use on a closely related product The majority's disregard for ZHD's substantial use of Zazu in connection with salon services is unfounded Even if ZHD did fail to demonstrate more than a de minimis market penetration nationally, at the very least it successfully established exclusive rights within its primary area of operation so L'Oreal shouldn't be allowed to sell in that region

Utilitarian functionality

Traditional Test (Inwood): a. If it is essential to the use or purpose of the article; OR b. If it affects the cost or quality of the article Other additional factors courts may consider but are not necessary: a. Whether a previous utility patent disclosed any utilitarian advantages of the design sought to be registered as a trademark b. Whether any advertising/promotion of the design touts its utilitarian advantages c. Whether alternative designs will perform its function equally as well d. Whether the design results from a comparatively cheap, simple, or superior method of manufacturing

Nominative Use

Where the D uses a trademark to describe the P's product, rather than its own, a commercial user is entitled to a nominative fair use defense provided that: 1. Not readily identifiable without referring to the trademark --> cannot identify the trademark's owners goods without using the trademark 2. Only as much of the mark is used as is reasonably necessary to identify the product 3. The user must do nothing that suggests sponsorship or endorsement by the trademark owner One may make "nominative" fair use of another's trademark to truthfully refer to a particular product for purposes of comparison, criticism, point of reference and the like

Abandonment

a trademark is abandoned when its owner stops using it with no intention to resume use If a claimant renews use of an abandoned mark, priority will run only from the date on which the claimant resumes use Three years nonuse of a registered mark constitutes prima facie abandonment Presumption can be rebutted by proving intent to resume use in the reasonably foreseeable future

An incontestable mark may be canceled ONLY if it

a. Becomes generic, b. Has been abandoned, c. Is being used to misrepresent the source of the goods or services in connection with which it is used, or d. It was obtained fraudulently or contrary to provisions in the Act

Dilution by blurring

an association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark Factors to consider in determining whether there is dilution by blurring: a. Degree of similarity --> between the mark or trade name and the famous mark Marks in a dilution analysis must be "identical" or "nearly identical" b. Distinctiveness --> the degree of inherent or acquired distinctiveness of the famous mark c. Substantially exclusive use --> the extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark d. Degree of recognition --> of the famous mark e. Intent to create association --> whether the user of the mark or trade name intended to create an association with the famous mark f. Actual association --> between the mark or trade name and the famous mark

Assignments in gross

assignments of trademarks alone, without any underlying assets or goodwill are invalid § 10 --> trademark rights are assignable with the goodwill of the business in which the mark is used, or with that part of the goodwill of the business connected with the use of and symbolized by the mark

Commercial disparagement

casts some kind of doubt about another's goods or services or commercial activities

Tea Rose-Rectanus doctrine

common law trademarks are protected only in the areas where the marked products are sold or advertised Exceptions based on concerns that the trademark owner's goodwill will be unfairly taken: a. A trademark owner is entitled to the exclusive use of his mark in any geographic area in which the mark's reputation has been established (even if the mark is not sold in that geographic area) Also, the trademark owner is entitled to protect the mark in a territory that he is expected to reach in the normal expansion of his business (even if there is no likelihood of confusion in that area) b. A trademark owner is entitled to prevent anyone from intentionally trading on his goodwill, even outside his established geographic area

Secondary meaning

exists when buyers associate a descriptive term with a single source of products Buyers do not need to know the identity of the source, only that the product or service comes from a single source To establish a secondary meaning, P must show that the primary significance of the term in the minds of the consuming public is not the product, but the producer Two ways to establish secondary meaning: 1. Circumstantial evidence Factors such as amount and manner of advertising, volume of sales, and length and manner of use 2. Direct evidence Survey evidence is the most direct and persuasive

Generic

indicates what type or category a product belongs to (tells the buyer what it is, not where is came from) Can NEVER be a trademark Either: a. Born generic --> refused registration or denied protection because they are generic ab initio b. Become generic over time --> genericide (registered generic mark will be canceled)

Acquired distinctiveness

need secondary meaning to secure trademark rights 1. Descriptive --> protected if acquires secondary meaning Identifies a characteristic or quality of an article or service such as its color, odor, function, dimensions, or ingredients

Cybersquatting

the act of registering a domain name containing a trademark with a bad faith intent to profit from ownership of that name Anticybersquatting Consumer Protection Act 1. Purported owner has a valid trademark entitled to protection 2. Mark is distinctive or famous 3. D's domain name is identical or confusingly similar to the owner's mark OR dilutive of if famous mark 4. D used, registered, or trafficked in the domain name 5. D did so with a bad faith intent to profit

Use in commerce

the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark Owner needs to have the trademark affixed on goods, containers, displays, tags, labels If service, harder to affix so owner uses the trademark on displays/advertising The goods need to have been used in commerce (sold or transported)

Dilution

the lessening of the capacity of a famous mark to identify and distinguish goods or services regardless of the presence or absence of (a) competition between the parties, or (b) likelihood of confusion, mistakes, or deception Dilution applies when the unauthorized use of a famous mark reduces the public's perception that the mark signifies something unique, singular, or particular

Indirect (contributory) infringement

the one being sued is not the one selling the products Inwood test --> To establish a claim for contributory infringement must prove: 1. Intentionally induce another to infringe; OR 2. Continues to supply its service to one whom it knows or has reason to know is infringing a. Specific knowledge about specific recipients; or b. Willful blindness 3. (factor when services not good) service provider must exercise sufficient control over the infringing conduct

Trade dress

the total image of the business --> design and packaging of materials, and even the design and shape of a product itself, if the packaging or the product configuration serve the same source-identifying function as trademarks Types of trade dress: 1. Packaging --> the wrapper around the product Can be inherently distinctive or acquired 2. Design --> what is being purchased; appearance of the product Can NEVER be inherently distinctive; must acquire secondary meaning 3. "Tertium quid" --> hybrid of packaging and design If no determination can be made, default to design so secondary meaning required

Comparative advertising/marketing

the use of another's trademark in the advertising or marketing of products or services is permitted provided there is truthful disclosure and no likelihood of confusion as to source, quality, or affiliation

Laches

those who sleep on their rights, lose them Elements of laches: a. P had knowledge of D's use of its mark; b. P unreasonably delays before objecting, or indicates acquiescence to the D's use; and c. D detrimentally relied upon P's inaction or otherwise would be inequitably prejudiced were P permitted to successfully assert its rights at the time of filing suit Exception to laches --> progressive encroachment To rebut a presumption of laches in a trademark case, P generally must show that D has made recent inroads on P's interests, such as entering P's geographic market, altering a product to make it more similar to P's, or extending the mark to goods and services that more directly compete with P's

Aesthetic functionality

very difficult to define based on the design, shape, color scheme, etc Example: Heart-shaped boxes of chocolates bought on Valentine's day. A company would probably be getting a significant non-reputation-related advantage if they were given a trademark for a heart-shaped chocolate box. Competitive Necessity Test: A functional feature is one the exclusive use of which would put competitors at a significant non-reputation-related disadvantage Alternative tests: a. Effective competition --> if it hinders the ability of another manufacturer, it is functional; OR b. Comparable alternatives --> if there are a variety of other features/designs available, it is not functional

Inherently distinctive

when a trademark is immediately capable of identifying a unique product source, rights to the mark are determined solely by priority of use 1. Fanciful --> automatically protected Never existed before - a coined mark 2. Arbitrary --> automatically protected Something preexisting in the world that you attach to a product and there is absolutely no connection between them Bear no relationship to the products or services to which they are applied 3. Suggestive --> automatically protected Suggests, rather than describes, some particular characteristic of the goods or services to which it applies and requires the consumer to exercise the imagination in order to draw a conclusion as to the nature of the goods and services

Dawn Donut Rule

while federal registration entitles the registrant to nationwide constructive use priority, to enjoin competitors from using the mark, the senior federal registrant must show more than mere priority What happens if two parties have established common law rights, then one party decides to get federal registration? Exception: The company that had established common law rights first gets to keep the rights (limited area defense), but they can't expand to new areas. The federal registrant will not have priority where there are preexisting common law rights.