Trademarks - Foley Hoag LLP

Trademarks
for the Generalist In-House Counsel
Handout Materials
July 26, 2016
Speakers
Julia Huston
Partner, Chair, Trademark, Copyright & Unfair Competition Practice
Foley Hoag
617-832-1166 | [email protected]
Joshua Jarvis
Partner
Foley Hoag
617-832-3018 | [email protected]
Nicole Kinsley
Associate
Foley Hoag
617-832-1185 | [email protected]
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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What’s a Trademark?
 An indicator of source: a brand
- A word
- A drawing
- Product packaging
- Product configuration
- A sound, scent, or taste
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Trademarks vs. Other Intellectual Property
 Copyright: protects original creative expression, in order
to encourage and incentivize creativity
- Most word marks are too short to be protected by copyright:
GOOGLE, NORTH FACE, COCA-COLA
- Some trademarks – like intricate logos or product designs –
involve enough creativity to benefit from copyright
protection as well
 Patent: protects useful, nonobvious, novel inventions and
processes for a limited time
 Design patent: protect ornamental features of useful
objects for a limited time
 Trade secret: a secret device or technique
- e.g., the COCA-COLA secret formula
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How Do In-House Counsel Encounter Trademarks?
 Developing or rebranding company and subsidiary
names
 Developing names of products and services, and
features of products and services
 Acquiring domain names and social media user names
 Developing trademark usage guidelines, social media
guidelines, and advertising best practices
 Acquiring or spinning off companies or divisions
 Licensing and merchandising agreements
 Litigation
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Purpose of Trademarks
 Trademark law benefits both providers and consumers of
goods and services
 Consumers come to know and trust brands
Trademark law:
- Protects consumers from confusion, from purchasing goods and
services of questionable quality
- Protects purveyors of goods and services against unfair
competition grounded in consumer confusion
- Allows brand owners to build up valuable goodwill and protect
long-term investment in marks
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Trademark Examples
 Word marks: OREO, COCA-COLA
 Logos:
 Product packaging:
 Product configuration:
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Spectrum of Trademark Strength
 A brand can only be protected as a trademark if it is
“distinctive”
 The more distinctive the trademark, the greater the
protection afforded to it against confusingly similar marks
subsequently adopted by third parties ‒ “junior” users
 Strength is not determined by the mark alone, but by the
relationship between the mark and the goods or services
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Spectrum of Trademark Strength
 FANCIFUL MARKS:
- The strongest marks are fanciful: coined terms invented for
the sole purpose of functioning as a trademark :
•EXXON (for oil and gasoline)
•VERIZON (for telecommunications services)
•FANTA (for soda)
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Spectrum of Trademark Stregnth
 ARBITRARY MARKS:
- Similarly strong are arbitrary marks: words that bear no
relation to the underlying goods or services:
•APPLE (for computers)
•CAMEL (for cigarettes)
•ADOBE (for computer software)
 Both fanciful and arbitrary marks are inherently
distinctive.
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Spectrum of Trademark Strength
 SUGGESTIVE MARKS
- those that suggest or “hint” at a quality or characteristic of a
good or service – are not as strong as arbitrary or fanciful
marks, but are still inherently distinctive:
•MICROSOFT (suggestive of software for microcomputers)
•BLU-RAY (suggestive of storage medium that uses violet lasers
to read data)
•COPPERTONE (suggestive of tanning lotion that will change
your skin tone)
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Spectrum of Trademark Strength
 DESCRIPTIVE
- phrases that are “merely descriptive” of goods or services
are not inherently distinctive:
• Purely descriptive terms:104 KEYS for computer keyboards, or FAST for bus
services
• Laudatory terms: BEST, GREAT, TASTY
 Descriptive marks can acquire distinctiveness
(“secondary meaning”) if owner can show that customers
recognize the mark as a brand – via surveys, evidence of
sales, widespread use
- POLAND SPRING
- FROSTED MINI-WHEATS
- ALL-BRAN
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Spectrum of Trademark Strength
 GENERIC TERMS
- words that are the actual name of a product or service are
never protectable.
• COMPUTER (for computers)
• BEER (for beer)
• E-COMMERCE (for online commerce services)
 “Genericide”: A strong trademark can become generic over
time if the public misuses the mark sufficiently, and if the
owner of the mark fails to adequately educate the public as
to its brand status:
-
ASPIRIN
CELLOPHANE
ZIPPER
ESCALATOR
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Tips for In-House Counsel: Trademark Strength
 Trademark selection:
- Push your clients toward the fanciful/arbitrary side of the
spectrum, or at least suggestive!
- This will make it easier to secure registration, and easier
to police and enforce against third parties
- More likely to accrue goodwill and value over time
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Trademark Clearance
 Clearance is typically recommended before adopting a mark and
filing a federal application.
- It is much easier to rebrand prior to a product/service launch, or
early in the product cycle.
- Identify prior use, applications and registrations, and legal risks,
through some combination of the following:
•Google and USPTO website review (tmsearch.uspto.gov/) – the
client can take these steps right at the start
•“Knockout” searches via third-party tools
•Full searches
 Consider international clearance as well – can be costly,
but worth it
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Tips for In-House Counsel: TM Clearance
 Clearance is often more expensive than the application
process, but don’t skimp if clearance is warranted!
 Sometimes clearance doesn’t make sense:
- If the mark has been in use for a long time
- If we’re concerned about third-party marks that could preclude an
application due to the “oath” issue
- If the mark is a complex design where clearance will be of limited value in
relation to the cost
 Simultaneous clearance and filing may be appropriate
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Acquiring Trademark Rights
 In the U.S., trademark rights (“common law” rights) are
established by use
 Rights are established when goods or services are first
provided in connection with the trademark
 Limited to geographic area of use
 In a conflict between confusingly similar trademarks, the
first or “senior” user has priority
 For marks that are used in interstate commerce (e.g.,
provided to customers across state lines), Federal
trademark registration provides significant benefits over
common law rights
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Benefits of Federal Registration
 Nationwide priority rights dating back to the filing date of
the federal application (even if mark is not yet in use)
 Public notice of your claim of ownership, and
presumptive evidence of ownership of the mark and the
exclusive right to use the mark nationwide in connection
with the listed goods and services
 Ability to record the mark with U.S. Customs to stop
importation of infringing/counterfeit goods
 Availability of certain statutory remedies
 Right to use the ® symbol instead of the ™ (or SM)
symbol
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Federal Application Process
 Relatively inexpensive
 Can be based on use or intent to use (ITU). If ITU, a Statement of
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Use will have to be filed before the mark can register.
An “Examining Attorney” at the USPTO looking for reasons to refuse
an application, like descriptiveness or conflict with prior applications
or registrations. The EA may refuse the application, by issuing an
Office Action. The applicant then has a chance to respond.
Once the EA approves an application, it is published for opposition,
and third parties have a chance to object. The trademark opposition
process resembles a (usually) small-scale litigation. Most
oppositions settle.
Even after a mark is registered, third parties can attack it through a
cancellation proceeding, claiming that it has become generic, has
been abandoned, or never should have registered
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Foreign Trademark Registration
 Country-by-country
 Some multi-country jurisdictions, such as the EU, and
the African Intellectual Property Organization (OAPI)
 Companies can take advantage of “International
Registrations” via the Madrid Protocol system, which
allows for simultaneous filings in many foreign
jurisdictions without the need of foreign trademark
counsel
 Trademark rights in most foreign countries are based on
registration – not on use – so early registration important
in countries of interest
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Tips For In-House Counsel: Filing Strategies
 Conduct periodic (at least annual) trademark coverage
audits:
- Divide up marks and jurisdictions in order of importance
- Develop a principled trademark strategy
- Revisit regularly to make new filings and clear up
“deadwood”
 Foreign Filings
- Before choosing a foreign partner/distributor, make a
preemptive trademark filing to avoid complications
- Think expansively: where are you likely to be in the short
term? In the medium term and long term?
- Don’t be caught without a registration when you need it
most!
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Lifespan of a Trademark
 How long do trademarks last?
- Unlike a patent or a copyright, a trademark can live forever
– so long as you use it!
- A US trademark registration needs regular maintenance, or
it will be canceled. A registrant needs to make a filing
stating that the mark is in use:
•between the 5th and 6th anniversaries of registration
•by the 10th anniversary of registration
•every ten years thereafter
- Foreign registrations need renewals as well; usually without
a proof of use.
- Tip for In-House Counsel: Get a docketing program, or
outsource the function, lest long-term deadline
management become a logistical nightmare
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Trademark Use Best Practices
 Use marks with at least an initial capital letter (trademark
lawyers tend to use marks in all caps)
 Use trademarks as adjectives, modifying generic nouns:
OREO cookies
 Use the appropriate trademark symbol: ® or TM
 Do not use a trademark as a noun.
This includes:
- Not pluralizing singular marks: e.g., BABY RUTHs
- Not making marks possessive: “the XBOX’s features include”
 Do not use trademarks as verbs: “Let me Google that.”
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Trademark Use Best Practices
 Trademarks should appear as trademarks:
- Bad: oreos
- Still pretty bad: Oreos
- Good: Oreo cookies
- Better: OREO cookies
- Even better: OREO® cookies, OREO™ cookies.
- EVEN BETTER: OREO® brand cookies
- BEST:
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Tips for In-House Counsel: TM Use
 Know what your clients are up to
- Circulate trademark and logo guidance, including to
licensees
- Periodic review of websites, social media pages, and
advertising materials
- Conduct internal training for best practices
• Use of ™ vs ®
• Proper trademark use
• No generic use
- Monitor your client’s use of third-party trademarks to
ensure fair use (more on that later)
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Trademark Enforcement
 Policing and enforcement are necessary to maintain
trademark rights.
- Third-party uses of similar marks in connection with related
goods and services can confuse consumers and dilute
trademark rights.
 Most trademark enforcement happens prior to litigation:
- Cease-and-desist letters
- Internet take-downs
- Coexistence and consent agreements
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Tips for In-House Counsel: Monitoring
 Monitor the marketplace for infringement!
- Engage trademark watch services
- Google Alerts
- Ask marketing and sales teams to be vigilant
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Trademark Enforcement: Litigation
 Trademark infringement: 15 U.S.C.§1114, 1125
- Standard: likely to cause consumer confusion as to the
source of goods or services, or as to sponsorship or
approval
- Courts look at multiple factors, including:
•Similarity of the marks
•Similarity of the goods or services
•Similarity of marketing channels and customers
•Degree of distinctiveness of the infringed mark
•Evidence of actual confusion
•Defendant’s intent
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Trademark Enforcement: Litigation
 Trademark dilution: 15 U.S.C.§1125(c)
- Only available for truly famous marks
- Standard: likely to cause dilution
•Dilution by blurring: famous mark weakened by identification
with dissimilar goods
- Example: Exxon brand orange juice: Customer confusion unlikely,
but dilution is possible
•Dilution by tarnishment: famous mark cast in unflattering light
through association of inferior, vulgar, or unhealthy products or
services
- E.g., TOYS R US pornography website, COCA COLA cigarettes
- Courts look at multiple factors, including degree of
distinctiveness of the famous mark, duration and extent of
use, and advertising and publicity of famous mark
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Trademark Enforcement: Litigation
 Possible remedies:
- Trademark infringement
•Injunctions against further infringement
•Defendant’s profits
•Damages sustained by plaintiff
•Costs and attorneys’ fees
•Damages may be trebled upon showing of bad faith
- Trademark dilution
•Injunctions against further dilution
•Damages, but only in the case of willful dilution
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Trademark Infringement: Defenses
 “Classic” Fair Use:
- When a descriptive mark is used in good faith for its primary
meaning.
•E.g., “my new cereal consists of all bran”
 “Nominative” Fair Use
- When use of a trademark is necessary for purposes of
identifying another product, e.g., in comparative advertising
- Restrictions:
•Other product or service is not readily identifiable without using
the mark
•Must only use so much of the mark as is reasonably necessary,
e.g., no logos!
•No suggestion of sponsorship or endorsement
 Limited Parody Defense
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Trademark Licensing
 Like other IP, trademarks can be licensed
 Unlike other IP, a trademark license requires that the
trademark owner to exercise quality control
- Licensor approval
- Product/service quality guidelines
- Periodic audits
 License should include guidelines and limitations
concerning proper use of mark
 Quality control requirement invokes implied warranty as
to quality of goods/services under the mark
- Can give rise to licensor liability
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Losing Trademark Rights
 Abandonment:
- Cease use of mark with intent not to resume (this is
presumed in the U.S. after three years of non-use)
 Unintentional loss of trademark rights:
- Failure to police rival marks
- Failure to police improper use (e.g., generic use of
“escalator”)
- Licensing a trademark without adequate control of the
nature and quality of the goods or services – “naked
licensing”
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Trademarks and Domain Names
 While domain name availability might drive branding, ownership of a
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domain name does not automatically create trademark rights
- Don’t forget trademark clearance!
Trademark rights don’t typically confer rights to a previously
registered domain name.
A trademark owner has legal remedies to combat “cybersquatting”:
- Uniform Domain Name Dispute Resolution Policy (“UDRP”)
- Uniform Rapid Suspension (“URS”)
- Anticybersquatting Consumer Protection Act (“ACPA”)
The domain name landscape is changing quickly – keep your eyes
open for both threats to and opportunities for your corporate clients
- Recent proliferation of hundreds of generic top-level domains
(gTLDs) such as .salon, .vip, .club, .online
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Tips for In-House Counsel: Domain Names
 Important: register domain names early and often
 “Backorder” domain names if they’re not available
 Consider making offers to purchase domain name if
they’re not available
- Do so anonymously, if possible, via a law firm or acquisition agent
• Potential increased prices
• Can become target for infringement
 Beware of domain name front-running
- Consider using a trusted services like DomainTools
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Agenda
 Trademark basics
 Trademark selection & clearance
 Acquiring trademark rights
- Common law rights
- Federal registration
- Foreign registration
 Trademark usage guidelines
 Trademark enforcement
 Trademark licensing
 Loss of trademark rights
 Domain names
 Social media
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Trademarks and Social Media
 Secure social media user names early, if possible prior
to public trademark filings
 As with domain names, your trademark rights will not
necessarily allow you to claim social media usernames
that have already been selected by someone else.
 When considering a new brand, one of the first steps
should be reserving that brand as a handle or username
on all social media sites – even ones you may not use.
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Tips for In-House Counsel: Social Media
 Control access to accounts/passwords
- Don’t let an employee leave with the “keys” to your social
media!
 Create guidelines for the company’s trademark use on
social media
 Be mindful of use of the trademarks and other content of
competitors!
 Keep in mind related concerns:
- False advertising
- FTC issues, especially endorsements and testimonials
- Copyright infringement
- Right of publicity
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Beware of Landmines
 Keep in mind related concerns:
- False advertising
- FTC issues, especially endorsements and testimonials
- Copyright infringement
- Right of publicity
 Be certain that those who can post on social media are well trained,
and have a process in place for vetting certain kinds of posts (like
comparative advertisements)
© 2015
2016Foley
FoleyHoag
Hoag
LLP.
LLP.
All All
Rights
Rights
Reserved.
Reserved.
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See you soon on our blog!
Cover option 2
Subtitle or Company Name
Month Day, Year
www.trademarkandcopyrightlawblog.com
© 2015
2016Foley
FoleyHoag
Hoag
LLP.
LLP.
All All
Rights
Rights
Reserved.
Reserved.
Proposal or event name (optional)
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