Worldwide: Trade Mark Infringement And Dilution As Causes Of Action: The US And UK Framework

Last Updated: 9 May 2014
Article by Christiana Aristidou

Trade marks are distinctive names, domain names, words, logos, slogans, phrases, symbols, images, colors, product designs, product packaging (trade dress) that manufactures or sellers affix to distinguish and identify the origin of their products. The owner of a trade mark has exclusive rights to use it or on the product it was intended to identify. Service marks receive the same legal protection as trade marks but are meant to distinguish services rather than products.

INFRINGEMENT

In the US, trade marks may be protected by both Federal Statute under the Lanham Act, (15 U.S.C 1051-1127) and States statutory and common laws. Under State common law, trade marks are protected as part of the Law of Unfair Competition. Registration is not required.

A trade mark infringement is an unauthorized use or reproduction of a trade mark that creates the likelihood of confusion in the mind of a consumer regarding the source of goods or services.

If the customer is found likely to believe that the trade mark infringer's goods or services are those of the person or entity who actually owns the trademark, damages may be awarded for the trademark infringement. In other words, the likelihood of confusion test seeks to answer the question of whether the junior user's use or reproduction of a trade mark creates a "likelihood of confusion" among consumers as to the source or association of the junior user's goods, such that infringes the senior user's rights.

Usually the following tests are used to determine likelihood of confusion and how they have been applied by the Courts:

  1. Strength of the mark1
  2. Similarity of the marks2
  3. Similarity of goods3
  4. Channels of trade4
  5. Consumer Sophistication5
  6. Wrongful Intent6
  7. Actual Confusion7
  8. Zone of Natural Expansion8

Where the marks, however, are similar and the products or services are also similar, it will be difficult to establish the "likelihood of confusion". In the case of AMF Inc., v. Sleekcraft Boats9, the plaintiffs owned the trade mark "Slickcraft" which they used to promote the selling of boats for general family recreation. They brought an action for trade mark infringement against the defendants who used the mark "Sleekcraft" in connection with the sale of high-speed performance boats. The Court thought that the products were indeed related but they were not identical; the two types of boats served substantially different markets. However, after applying many of the tests listed above, the court decided that the use of Sleekcraft was likely to cause confusion among consumers.

In UK the "likely of confusion" is an essential requirement for a finding of infringement under s.10 (2) of the Trade Mark Act. This includes a "likely of association also which was first introduced into UK trade mark law by The 1994 Act 10 Section 10(2) of the TMA provides that if an identical or similar sign is used in conjunction with identical or similar goods for which a mark is registered then there is infringement if there is a likelihood of public confusion. In cases falling under this section, judges apply a three part test. First consider the identity similarity of the mark with the sign; second, analyse the concept of similarity between the respective goods and services; and third, determine whether there was a likelihood of confusion because of that similarity. Section 10(1) of the Act provides that if a sign that is identical to a registered trade mark is used in the course of trade in connection with identical goods and services for which the mark is registered then there is infringement. This is a type of infringement that does not require proof of a likelihood of confusion on the part of the public. In Decon Laboratories Ltd., v. Fred Baker Scientific Ltd.,11 the claimant's registered trade mark was the word "Decon". The defendant sold identical products under a range of marks that included the word "Decon". This was held to infringe as the principal function of the suffixes was to describe the product and they did not distinguish the defendant's products from those of the claimant. Section 10(3) of the Act provides that a registered trade mark is infringed in the UK if a similar or identical mark is used in relation to goods or services which are not similar to those for which it is registered, where the trade mark has a reputation and the use of the sign without due course takes fair advantage of or is detrimental to the distinctive character of the trade mark. This section is actually focusing on dilution which will be discussed further in this essay.

DILUTION

On January 16, 1996, the Lanham Act was amended to provide for a trade mark dilution claim. Dilution is the "gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name."12 Or, is the use of a famous trademark in a way that would lessen its uniqueness."13 In most cases, trademark dilution involves an unauthorized use of another's trademark on products or services that do not compete with. A trade mark is diluted when the use of similar or identical trade marks in other non-competing markets means that the trademark in and of itself will lose its capacity to signify a single source.14 Dilution differs from normal trademark infringement in that there is no need to prove a likelihood of confusion to protect a mark nor is there any need to show competition between the goods of the plaintiff and the defendant. Dilution protection law aims to protect sufficiently strong trademarks from losing their distinctive quality or uniqueness in the public mind. A dilution claim can be brought only if the mark is "famous". The determination of what constitutes a "famous" mark will probably involve a great deal of litigation in the coming years. Under the terms of the Act, courts may look at the following factors in determining whether a mark is famous:

  1. The duration and extent of use of the mark,
  2. the duration and extent of advertising for the mark,
  3. the geographic area in which the mark has been used,
  4. the degree of distinctiveness of the mark (either through the nature of the mark itself, or through acquired distinctiveness),
  5. the degree of recognition of the mark,
  6. the method by which the product was distributed and marketed (the» channels of trade"),
  7. the use of the mark by third parties,
  8. Whether the mark was federally registered.

A mark may be diluted by either "blurring" or "tarnishment". Dilution through blurring occurs when a junior mark is used with goods or services different from those originally associated with the senior mark thus diminishing the distinguishing and identifying power of the senior mark. The case of Panavision Intern., L.P. v. Toeppen states that blurring "involves a whittling away' of the selling power and value of a trademark by unauthorized use of the mark."15 In this way the use of the junior mark diminishes the power of the famous mark to quickly call to mind and distinguish the goods or services associated with that mark. Dilution through tarnishment may occur when an accused junior mark is used on unwholesome or inferior goods or services that may create a negative association with the goods or services covered by the famous mark.16 A trademark may therefore be diluted through tarnishment on the internet which may occur by "linking"17 of a trademark to lesser quality products or unwholesome material.18 Indeed, by linking the mark to poor quality products the famous mark loses its established good will. In Toys "r" Us, Inc., v. Akkaoui,19 the defendant was enjoined from use of the web site adultsrus.com because the selling of adult sexual products at the site was found to tarnish the plaintiff's famous mark.

As mentioned above, Section 10(3) of the Trade Marks Act 1994, deals with dilution situations. In UK, again dilution occurs through blurring or tarnishment of the reputation of a well known or famous trademark. The Act is silent as to whether a likelihood of confusion is required to infringe under s. 10 (3). This form of infringement is limited to marks enjoying a reputation. According to Pumfrey J. In DaimlerChrysler AG v Javid Alavi (t/a MERC)20, the following requirements must be satisfied: (a) the claimant's trademark must be found to have a reputation in the UK, (b) identity with or similarity to the trade mark of repute must be shown, (3) the use of the sign complained of must take advantage of or cause detriment to the distinctive character or repute of the claimant's trade mark, (d) the use of the sign complained of must be without due cause. According to the Standing Committee on the Law of Trade Marks of the WIPO, the following information must be examined by Courts when deciding whether a mark is a well known or famous one:

  1. The degree of knowledge or recognition of the mark in the relevant sector of the public,
  2. the duration, extent and geographical area of any use of the mark,
  3. the duration, extent and geographical are of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions of the goods and/or services to which the mark applies,
  4. the duration and geographical area of any registrations and/or any applications for registration of the mark to the extent that they reflect use or recognition of the mark,
  5. the record of successful enforcement of rights in the mark, in particular, the extent to which the mark was recognized as well known by courts or other competent authorities and
  6. the value associated with the mark.

Following a routine check on my trademark I found that it has been infringed; I discovered the existence of a domain name that is identical or confusingly similar with my trademark. The infringing domain could very probably damage the goodwill and repute of my mark and cause me loss and damages. The first thing I can do is to send to the infringer a "cease and desist" letter stating that I have a trademark on which he is infringing and causes me damage and that he (the infringer) must immediately cease using my mark and not to use it in the future. Furthermore, I will ask him to transfer the domain to me and that if he fails to do that, that I will take all appropriate legal measures including claiming damages. I could enter a mark license agreement with the infringer but I don't want to take this option.

If the infringer continues infringing my trade mark even after my notice given to him within my cease and desist letter, I will have to think of my next step to take.

ICANN's Uniform Dispute Resolution Policy and the Anticybersquatting Consumer Protection Act can be used by trademark owners to stop infringing domain names and obtain "ownership" of the domain name.

If the domain name was one controlled by Nominet UK I could use Nominet's Dispute Resolution Service to have the registration cancelled or suspended or to ask the registration to be given to me to control haw the domain is used. The requirements of a valid complain under the Nominet DRS are:

  1. the complainant has rights in respect of a name or mark which is identical or similar to the contested domain name,
  2. in the hands of the respondent, the domain name is an abusive registration, that is one which was registered or otherwise acquired or has been used in a manner which took unfair advantage of, or was unfairly detrimental to the complainant's rights.

However, it seems that I will have to dispute the ownership of a .com generic top level domain name. Therefore, I should use the Uniform Dispute Resolution Policy (UDRP). The system is not operated by Nominet. It is, however, quite similar to that.

Therefore, if I choose to use the ICCAN's UDRP, the following requirements must be established for me to succeed in my claim:

  1. The domain name is identical or confusingly similar to my trademark in which I have rights,
  2. The respondent holder has no rights or legitimate interest in respect to the domain name and
  3. The domain name has been registered and is being used in bad faith.

It will not be difficult to establish the first requirement as I consider the domain name is identical to my trademark. In this case I will not have to prove a "likely of confusion". If the UDRP follows UK's position, then the first requirement determines whether I have a legitimate interest. So, it seems highly possible that the second requirement will also be established. Establishing the last requirement seems in my case to be more difficult. Indeed the policy is intended to catch respondents who have registered domain names primarily with a view to selling them to complainants. I will try to bring that information that are relevant to establish the respondent's intention to sell the domain. I will discuss this with my lawyer who will help me to decide.

I could, of course, follow the court route and sue the infringer for trademark infringement and/or dilution. However, DRP tent to be cheaper than court proceedings. On the other hand if I choose to sue him at Court I will not have to prove bad faith from his part. If the infringement was not limited to the domain, I would definitely have to follow the court procedure and ask for an immediate injunction. In such case I would also have the chance to recover costs and damages.

Footnotes

1 See America OnLine Inc. v. AT&T Corp., 64 F.Supp. 2d 549 (E.D. Va. 1999), affirmed in part and vacated in part, 243 F. 3d 812(4th Cir. 2001)

2 see TCPIP Holding Co., Inc v. Haar Communications, inc., 244 F 3d 88, 101-02 (2d Cir. 2001) and BigStar Entertainment, Inc v. Next Big Star, Inc., 105 F. Supp. 2d 185, 215 (S.D.N.Y. 1999)

3 see Network Network v. CBS, Inc., 54 U.S.P.Q. 2d 1150 ( C.D. Cal. 2000)

4 see Trans Union LLC v. Credit Research , Inc., 142 F. Supp. 2d 1029, 1042-43 ( N.D. Ill. 2001)

5 see BigStar Entertainment, Inc., ibid f.3

6 see TCPIP Holding Co, Inc., ibid f. 2, Eli Lilly & Co v. Natural Answers, Inc., 233 F. 3d 456, 465 ( 7th Cir. 2000) and N.Y. State Society of Certified Public Accountants v. Eric Louis Assoc., Inc., 79 F. Supp. 2d 331, 341-42, 348-52 ( S.D.N.Y. 1999)

7 see Network Network, v. CBS., Inc., ibid f.3

8 see BigStar Entertainment., Inc., ibid f. 3

9 599 F. 2d 341 (9th Cir 1979)

10 see David Bainbridge, Intellectual Property, 5th ed. 602 also see Wagamama Ltd., v. City Center Restaurants plc. [1995]FSR 713

11 [2001] RPC 293

12 see Frank I. Schechter, the Rational Basis of Trademark Protection, 40 Harv. L.Rev. 813,821-26, 830-32 (1927)

13 see http://en.wikipedia.org/wiki/Trademark

14 ibid

15 see Panavision Int'l, L.P. v. Toeppen, 945 F. Supp. 1296, 1304, 40 U.S.P.Q. 2d (BNA) 1908, 1914 (C.D. Cal. 1996)

16 see Deere & Co. v. MTD Productions, Inc., 41 F. 3d 39, 44, 32 U.S.P.Q. 2d (BNA) 1936, 1939 (2d Cir. 1994).

17 Linking involves establishing a connection to another site on a company's web page to immediately transfer the consumer to the other location.

18 See Elizabeth Robinson Martin, "Too famous to live long" The Anticybersquatting Consumer Protection Act Sets Its Sights To Eliminate Cybersquatter Opportunistic Claims On Domain Names, 31 St. Mary's L.J. 815 1999-2000

19 40. U.S.P.Q. 2d 1836 (N. D. Cal. 1996),

20 [2001]RPC 813

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