The Role of the American Trademark in the 21st Century

By: Adam Grodman

I. Introduction

The term “trademark” includes any word, name, symbol, or device, or any combination thereof used by a person 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. [1]

 

Trademarks are a property right, but those property rights are not unlimited. [2]Trademarks can be obtained by adopting and using a trademark in association with goods or services. [3]Marks need to be used in commerce before protection is available. [4]

 

Trademarks are not intended to create monopolization of words or phrases. They are intended to help consumers identify a product’s source of origin. [5] Trademarks do this by leveraging distinctiveness.

 

Marks can become distinctive in two ways: (1) they can acquire distinctiveness over time, or (2) they can be inherently distinctive. Distinctiveness is a pre-requisite for registration, which provides national protection for a mark. The geographic scope of a common law trademark is limited to the geographic area of its actual use. [6] Basically, an unregistered mark can acquire distinctiveness in the geographic area that it is used in, while a registered mark is considered distinctive throughout the country. [7]

 

To prove that a mark has acquired distinctiveness, courts consider six factors:
(1) advertising expenditures;
(2) consumer studies linking the mark to a source;
(3) sales success;
(4) unsolicited media coverage of the product;
(5) attempts to plagiarize the mark; and
(6) the length and exclusivity of the mark’s use.
Secondary meaning exists if a “substantial portion” of the relevant consuming public associates the term with the particular business, id., and the applicant bears the burden of proof. [8]

 

Have you ever wondered what the ® symbol means, or wondered why new products or services are often followed by a TM symbol? Registered trademarks are indicated by the ®, while unregistered marks are followed by TM.

 

Distinctive marks may be registered on the Principal Register. [9] The Principal Register is a list of registered trademarks. [10] Registration on the Principal Register allows mark owners to avail themselves of the protections of the Lanham Act, including preventing the registration of other confusingly similar marks. [11]

 

Registration has many benefits, including:

 

• Constructive notice to the public of the registrant’s claim of ownership of the mark (15 U.S.C. §1072);
• A legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use the mark in commerce on or in connection with the goods/services listed in the registration (15 U.S.C. §§1057(b), 1115(a));
• A date of constructive use of the mark as of the filing date of the application (15 U.S.C. §1057(c); TMEP §201.02);
• The ability to bring an action concerning the mark in federal court (15 U.S.C. §1121);
• The ability to file the United States registration with the United States Customs Service to prevent importation of infringing foreign goods (15 U.S.C. §1124);
• The registrant’s exclusive right to use a mark in commerce on or in connection with the goods or services covered by the registration can become “incontestable,” subject to certain statutory defenses (15 U.S.C. §§1065, 1115(b)); and
• The use of the United States registration as a basis to obtain registration in foreign countries. [12]

 

Basically, trademark registration provides powerful mechanisms for protecting or “enforcing” trademark rights. The benefits of registration are worth pursuing and provide trademark owners with a means to protect their reputation throughout the United States, as well as provide mechanisms to expand the use of their mark internationally. The Supplemental Register is a second trademark register where trademarks can be registered that are not yet eligible for registration on the Principal Register, but may, over time, become an indicator of source. Marks registered on the Supplemental Register, like those registered on the Principal Register, are protected against conflicting marks in later-filed United Stated Patent and Trademark Office (“USPTO”) applications. Supplemental Register registrations do not receive the same legal advantages and presumptions of Principal Register registrations. [13]

 

Trademark protection stems from the Lanham Act as opposed to the United States Constitution. [14] As such, a brief look into the history of trademarks can provide important context for understanding their role in modern society.

 

II. Brief history

Unlike copyrights or patents, the right to obtain trademarks does not arise from the constitution. Also, unlike copyrights or patents, trademarks do not have to be original or inventive, and they can potentially last indefinitely, if they are continuously used. [15] Unlike copyrights and patents, the protection of which is for the benefit of public knowledge, trademarks exist to protect a product or service’s ability to identify its source of origin. [16] Thus, if a corporation stays in business and complies with trademark renewal formalities, they are theoretically entitled to continue using their trademark forever. Trademarks just have to be distinctive and used in commerce to maintain the protections of the Lanham Act. [17]

 

Common law trademarks and the right to their exclusive use can be classified as a property right. [18]
“A man’s right to the continued enjoyment of his trade reputation and the good-will that flows from it, free from unwarranted interference by others, is a property right, for the protection of which a trademark is an instrumentality.” [19] The right grows out of use, not mere adoption. The trademark is treated as merely a protection for the good-will, and not the subject of property except in connection with an existing business. [20]

 

The protection of trademarks is the law’s recognition of the psychological function of symbols.
The aim of trademarks is to convey through the mark, in the minds of potential customers, the desirability of the commodity upon which it appears. Once this is attained, the trade-mark owner has something of value. [21]
If another poaches upon the commercial magnetism of the symbol he has created, the owner can obtain legal redress. [22]

 

“A trademark does not confer a right to prohibit the use of the word or words. It is not a copyright. . . A trademark only gives the right to prohibit the use of it so far as to protect the owner’s good will against the sale of another’s product as his.” [23]

 

The historical goal of trademark law was to protect the goodwill associated with a distinctive mark and prevent confusion among the consuming public. [24] Trademark rights have expanded over time to include trade dress, discussed further in Section III. [25] Product design can be protected upon a showing of secondary meaning and can also be registered with the United Stated Patent and Trademark Office (“USPTO”). [26] This recent expansion of rights has led to litigation to define the scope of trade dress rights.

 

III. Limitations on Trademark Rights – What They Do Not Protect

Trademarks can protect a broad range of things. Large companies often try to trademark component parts of their technologies – such as syringes, phones, and tractors – to prevent outside companies from offering cheaper alternatives or repair options. [27] This sort of protection within the realm of trademarks is referred to as trade dress.

 

People and companies have sought trade dress protection for smells, shapes of jean pockets, sounds, colors, designs of manufacturing equipment, needles, and so on. [28] Trademark limitations serve an important role in preventing the perpetual protection of certain useful shapes. Trade dress is generally unprotectable if it either (1) lacks distinctiveness or is (2) functional. Both limitations are discussed in detail in sections a. and c., respectively.

 

a. Distinctiveness

Trade dress that lacks distinctiveness will not acquire protection, much like a word mark that lacks distinctiveness. [29] The simplest way to provide evidence of distinctiveness is to get trade dress registered on the principal register. If the trade dress is not registered, the burden of proof is on the plaintiff to prove that the trade dress has either acquired distinctiveness or is inherently distinctive. [30]

 

Inherent distinctiveness can be shown by proving that “the trade dress is unusual, memorable, fanciful, suggestive, arbitrary, separate from the product or service (separately recognized, for example), or commonly regarded as being associated with the product or service (i.e. being a designator of the product’s source). Unfortunately, the tests that courts apply to determine inherent distinctiveness vary depending on the jurisdiction and the nature of the trade dress” [31]

 

Acquired distinctiveness can be proven through the use of consumer surveys or expert testimony, as well as proving direct copying. [32] Additionally, a plaintiff can show how long the trade dress has been in use, the sales volume achieved in that time, and the advertising used that has featured the trade dress. [33]

 

b. Trade Dress and Patents

Often times companies desire to protect the designs of their products. The options for these companies to protect designs are either to file a patent or through registering trade dress with the USPTO. Trade dress protection prevents anyone else from using the feature in any way likely to cause confusion as to another product’s origin. Product features are presumed to be functional. [34]

 

A design patent is a form of legal protection of the unique visual qualities of a manufactured item. Design patents may be granted if the product has a distinct configuration, distinct surface ornamentation or both. Design patents protect the ornamental design of something that has a practical utility. [35] Design patent holders have the right to prevent other people from applying the design, or any colorable imitation, to any article of manufacture for the purpose of sale or selling or exposing for sale any article of manufacture with the design applied. [36] Courts of Appeals have developed factors they consider to determine if a trade dress is functional. [37] One factor courts consider is whether the trade dress is also protected by a design patent. [38] Because design patents must be ornamental, this serves as support – and is sometimes dispositive proof – that trade dress is non-functional. [39]

 

Utility patents, on the other hand, cover the creation of a new or improved—and useful—product, process, or machine. [40] A utility patent prohibits other individuals or companies from making, using, or selling the invention without authorization. [41] Utility patents are the type of patent that most people refer to when they are discussing patents. [42]
The Supreme Court first discussed trade dress in Two Pesos v. Taco Cabana, where Two Pesos copied the look and feel of Taco Cabana’s Mexican-themed fast food restaurant. [43] The Court ruled that proof of secondary meaning is not required to prevail on a trade dress infringement claim if the trade dress at issue is inherently distinctive. [44]

 

c. Functionality

Trade dress will not be protected if it is not inherently distinctive, or if it is functional. [45] The functionality doctrine in trademark law holds that functional features of products are not eligible for trademark protection, because doing so would impede competition. [46] A wide variety of subject matter can serve as trade dress, but all subject matter must pass the functionality test to be afforded trademark status. [47] The Federal Circuit has held that color can serve as a trademark provided that the color does not serve any functional purpose or address a competitive need. [48]

 

i. Utilitarian v. Aesthetic Functionality

The doctrine of functionality incorporates utilitarian and aesthetic functionality to prevent monopolization of useful and aesthetic designs for which there is competitive need. [49] Utilitarian functionality prevents trade dress protection for utilitarian design of the thing under consideration. [50] “Utilitarian” means superior in function or economy of manufacture. [51] The superiority is determined in light of competitive necessity to copy. To determine if something is functional, courts consider the following factors [52]:

 

(1) Existence of expired utility patent disclosing utilitarian advantages of the design
(2) Advertising/promotion touting utilitarian advantages of the design
(3) Existence of alternative designs which perform the function equally well
(4) Whether or not the design results from a comparatively simple, cheap, or superior method of manufacturing the article [53]

 

The fact that a patent was issued for a product feature and has expired is strong evidence that the feature was functional. [54] Eligibility for protection under §43(a) depends on nonfunctionality. [55] Liability under §43(a) requires proof of the likelihood of confusion. [56] When patents get issued for a product feature and then expire, this is considered strong evidence that the feature was functional. [57] The party seeking trade dress protection for the feature carries the heavy evidentiary burden of showing that the feature is not functional.

 

In terms of aesthetic functionality, courts worry about effective competition. In Brunswick v. British Seagull, 35 F.3d 1527 (1994), the Federal Circuit held that a color that serves a competitive need for a class of products will be deemed to be a functional feature and therefore is not eligible for trademark protection. [58] In Brunswick, the plaintiff filed a trademark application for black outboard engine motors. Defendants opposed their application, and the Trademark Trial and appeal Board (“TTAB”) denied Plaintiff’s application. On appeal, the Federal Circuit determined that there was a competitive need for black motors. [59] The color black makes boat engines appear smaller, and also happens to coordinate most easily with many boat colors. Thus, competitors would be put at a competitive disadvantage if they were foreclosed from using the color black by virtue of the Plaintiff’s trademark. [60]

 

Functionality serves to limit the boundaries of potentially perpetual trademark protection for things that are useful. [61] The courts generally take the view that these designs should be patented, licensed, and once their terms expire, should be exploitable and reverse engineered once they are in the public domain to promote competition.

 

IV. Conclusion

Trademarks are a limited property right that helps trademark owners and consumers. Trademarks help consumers in the sense that they allow consumers to quickly and confidently identify brands. Trademarks also help trademark owners by giving them tools to prevent other companies from free riding off their good will. Trademarks reduce transaction costs for consumers to pick the product they want, because people can rely on the quality of a given mark. For example, this allows consumers to know that every time they drink a particular soft drink, it will taste the same way. Knowing this, a consumer does not need to spend as much time searching the aisles for a mystery drink, only to be disappointed when they grab the wrong product off the shelf. Consumers can identify products faster and can more easily identify and distinguish one product from another.

 

Trademark law ensures protection for brand owners, as well as consumers. For brand owners, they can take steps to prevent confusingly similar marks from getting registered. For consumers, they can easily tell when they are getting genuine, brand-name products because trademarks encourage investment in quality products by producers.

 

[1]Restatement 3d Unfair Competition (1995).

[2]KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111 (2004).

[3]Abercrombie & Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 14 (2d Cir. 1976).

[4]See TMEP § 901; see also 15 U.S.C. §1051(a) (requiring use in commerce to receive registration).

[5]Booking.com B.V. v. Matal, 278 F.Supp.3d 891 (E.D. Va. 2017).

[6]Aaron Larson, Trademark Law (May 7, 2018). ExpertLaw available at: https://www.expertlaw.com/library/intellectual_property/trademark_law.html; see also United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1918) (holding that unregistered trademark rights are limited in scope to the areas where a mark is used).

[7]Id.

[8]Booking.com, 278 F.Supp.3d at 918-923.

[9]15 U.S.C. § 1052(f).

[10]15 U.S.C. §1057 (a)-(h).

[11]See TMEP §1607; see also 15 U.S.C. §1064; 37 C.F.R §2.111. See TMEP §§303, 307 308, and 309 (for details about requirements and fees for filing a petition to cancel a registration).

[12]See Trademark manual of Examining Procedure (“TMEP”) §801.02.

[13]See 15 U.S.C. §1094; 37 C.F.R. §§2.47, 2.75(a); and TMEP §§801.02(b), 816.

[14]15 U.S.C. §1051(a).

[15]What is a Trademark? UNITED STATES PATENT AND TRADEMARK OFFICE, https://www.uspto.gov/about-trademarks.

[16]See U.S. Const. Art. I §8. Cl. 8; see also Golan v. Holder, 565 U.S. 302 (balancing the importance of public domain works and protecting authors’ rights to exploit their copyrighted works).

[17]15 U.S.C.A §1127.

[18]Trade-mark Cases, 100 U.S. at 82, 92, 93.

[19]Hanover Star Milling Co. v. Metcalf, 240 U.S. 403 (internal citations omitted).

[20]Id.

[21]Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co. , 316 U.S. 203 (1942).

[22]Id.

[23]Prestonettes, Inc. v. Coty, 264 U.S. 359 (1924).

[24]Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938); see also Blinded Veterans Ass’n v. Blinded Am. Veterans Found., 872 F.2d 1035, 1042 (D.C. Cir. 1989) (holding that Analogously, if an organization’s own name is generic, a competitor’s subsequent use of that name may give rise to an unfair competition claim if the competitor’s failure adequately to identify itself as distinct from the first organization causes confusion or a likelihood of confusion).

[25]See Taco Cabana Inc. v. Two Pesos, Inc., 505 U.S. 763 (1992) (holding that trade dress is protectable under §43(a) od the Lanham Act); see also Wal-Mart Stores, Inc. v. Samara Brothers, Inc. , 529 U.S. 205 (2000) (holding that product design trade dress is capable of protection if it has proof of acquired distinctiveness or secondary meaning).

[26]TMEP § 1202.02, Registration of Trade Dress.

[27]In Re Clarke, 17 U.S.P.Q.2d 1238 (TTAB 1990).

[28]In Re Clarke, 17 U.S.P.Q.2d 1238 (TTAB 1990) (attempting to register floral fragrance for thread); Oliveira v. Frito-Lay, Inc. , 251 F.3d 56, 62 (2d Cir. 2001) (denying protection for this particular sound mark),. In re Becton, Dickinson & Co. , 675 F.3d 1368, 1376 (Fed. Cir. 2012), ( denying trademark protection for shape of syringe due to functional aspects of design).

[29]See In re Chippendales USA, Inc. , 90 U.S.P.Q.2d 1535 (TTAB 2009) (holding Chippendales “cuff and collar” design mark non-distinctive); see also Samara, 29 U.S. 205 (2000) (holding children’s clothing line non-distinctive without proof of secondary meaning).

[30]Id. at __; see also Taco Cabana Inc. v. Two Pesos, Inc. , 505 U.S. 763 (holding that trade dress is protectable upon a showing of secondary meaning).

[31]UpCounsel, TRADE DRESS: EVERYTHING YOU NEED TO KNOW, https://www.upcounsel.com/trade-dress (last accessed Mar. 01, 2020).

[32]Id.

[33]Id.

[34]TrafFix Devices, Inc. v. Marketing Displays, Inc. , 532 U.S. 23, 32 (2001).

[35]Will Kenton, Design Patent Title (Aug. 21, 2019), https://www.investopedia.com/terms/d/design-patent.asp (last visited Mar. 1, 2020).

[36]35 U.S.C. § 1295(a).

[37]See, e.g., Value Engineering, Inc. v. Rexnord Corp. , 278 F.3d 1268, 1276 (Fed. Cir. 2002).

[38]Id. at 32.

[39]1 McCarthy on Trademarks and Unfair Competition § 7:93 (5th ed.).

[40]35 U.S.C. §101.

[41]Id.

[42]Will Kenton, Utility Patent Title (Jun. 25, 2019 https://www.investopedia.com/terms/u/utility-patent.asp (last visited Mar. 1, 2020).

[43]Id.

[44]Taco Cabana Inc. v. Two Pesos, Inc. , 505 U.S. 763.

[45]Id. at 767.

[46]Samara, 29 U.S. 205 (2000).

[47]In re Morton-Norwich Prod., Inc. , 671 F.2d 1332, 1338-1340 (C.C.P.A. 1982).

[48]Id. at 1342-1344.

[49]In re Owens-Corning Fiberglass Corp. , 774 F.2d 1116 (Fed. Cir. 1985); see also Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d 1312, 1328 (Fed. Cir. 2015).

[50]Vuitton et Fils S.A. v. J. Young Enterprises, Inc. , 644 F.2d 769, 210 USPQ 351 (9th Cir. 1981); International Order of Job’s Daughters v. Lindeburg and Co. , 633 F.2d 912, 208 USPQ 718 (9th Cir. 1980); Famolare, Inc. v. Melville Corp. , 472 F.Supp. 738, 203 USPQ 68 (D.Hawaii 1979).

[51]In re Morton-Norwich, 671 F.2d at 1343.

[52]Id. at 1335.

[53]See 15 U.S.C. § 1052 (stating that trade dress cannot be registered if it is functional); 15 U.S.C. § 1125(a)(3) (requiring proof the unregistered trade dress is not functional to sue for infringement).

[54]TrafFix 532 U.S. at 32-33; ); see also Ethicon Endo-Surgery, Inc. v. Covidien, Inc, 796 F.3d 1312, 1328 (Fed. Cir. 2015).

[55]TrafFix, 532 U.S. at 29-30.

[56]TrafFix, 532 U.S. at 32.

[57]See Taco Cabana Inc. v. Two Pesos, Inc. , 505 U.S. 763 (restaurant design); In re Becton, Dickinson and Company, 675 F.3d 1368 (Fed. Cir. 2012) (syringes).

[58]TrafFix 532 U.S. at 32-33.

[59]Brunswick v. British Seagull, 35 F.3d 1527 (1994).

[60]Id. at 1533.

[61]Id. at 1534.

[62]McCarthy, supra note xxix, at § 7:63.