Trademark Priority + TM Office Procedures/Incontestability

Intro to IP – Prof Merges

3.16.12 [Originally scheduled for 3.13 and 3.15.2012]

Agenda

• Priority

– Federally Registered Marks

– Common Law trademarks

Hinsdale 630-325-8126 Naperville 630-355-2230 Wheaton 630-221-8300 Oak Brook 630-928-1510

Zazu Designs, Inc. v. L’Oreal

1985

2/864/866/12/86

1987

4/86 Covenant with Riviera; 1st Interstate shipment

Meets with Chemists; sales in salon

L’OrealZHD

ZHD Files Suit

11/85; 2/86: Shipments to Texas & Florida

Federal Registration

How do you establish priority?

• Common law origins: Must “win the race to the marketplace” – IPNTA 5th at p. 779

• BUT: There are some detailed rules to this race . . .

Lanham Act sec. 1, 15 USC 1051

“(a)(1) The owner of a trademark used in commerce may request registration of its trademark on the principal register hereby established . . . .”

Caselaw: Balancing two factors

• “Prevent[] entrepreneurs from reserving brand names in order to [raise rivals’ costs]” – prevent “Rent Seeking” – IPNTA 5th p.779

• “Allow[] firms to seek protection for a mark before investing substantial sums in promotion” – “Claim-staking” – IPNTA 5th p. 779

Sound familiar?

• Utility in patent law: prevent “wrong kind” of racing, but permit reasonable claiming

• Derivative works in copyright: allow owner to develop ancillary markets without fear of competition

Use requirement

• Policy justifications– Furthers purpose of trademark (I.D. source)– Prevents warehousing of trademarks– Provides notice to others

• Possible drawbacks– May cause uncertainty re: when rights attach– May result in loss of preparatory expenses

A twist: “Intent to use”

• Allows “reservation” of right to a trademark

• But ONLY if reserved mark is actually used within 6 months (extendable to 1 yr. and then three years for good cause)

Intent to use statute: Lanham Act Sec. 1(b), 15 USC 1051(b)

(b)(1) A person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the Patent and Trademark Office an application and a verified statement, in such form as may be prescribed by the Director.

Lan Act Sec 13, 15 USC 1063

(b)(2) a notice of allowance shall be issued to the applicant if the applicant applied for registration under section 1051(b) of this title. . . .

“Use in Commerce”• Lanham Act § 1 (15 U.S.C. § 1051)– (a)(1) The owner of a trademark used in commerce

may request registration …• Lanham Act § 45 (15 U.S.C. § 1125)–Commerce: All commerce which may lawfully

be regulated by Congress

–Bona fide use of a mark in the ordinary course of trade, and not merely made to reserve a right in a mark.

Maryland Stadium v. Becker: IPNTA 5th 786

1987

1988

1989

1990

1991

1992

Starts selling T-Shirts

New ballpark approved

BeckerMSA

Old buildings demolished

New stadium begins to rise

Named Camden Yards

First game played

Extensive advertising,promotion, and use

What constitutes “use”?

• Use in a bona fide way, targeted at customers• Key is “use” not “sale”– Sales probative of use, esp. if followed by more– But neither necessary nor sufficient• Single sale may not be sufficient (Blue Bell, Lucent)• Token sales not sufficient (Blue Bell, P&G)• Preparatory activity may be sufficient (Shalom, Becker)

– Look to totality of circumstances

Registration - Priority

• Lanham Act §7(c) (15 U.S.C. 1057(c)):– Contingent on the registration of a mark …, the

filing of the application … shall constitute constructive use of the mark, conferring a right of priority, nationwide in effect, in connection with the goods … specified … against any other person except for a person whose mark has not been abandoned and who, prior to such filing - (1) has used the mark …

Multiple TM Users – 3 scenarios

• The first to use in commerce registers the trademark: the “senior user” gains nationwide rights

• Neither user of the TM seeks federal registration: both have rights in respective territories

• Both use TM, then one or both seek federal registration

Common Law Rights and Concurrent Use

• Two types of concurrent use– Different Products

• E.g. Apple Records and Apple Computers• E.g. Acme Cleaners, Acme Mufflers, Acme ...•

–Different Geographic Markets•E.g. Broadway Pizza (Boston) and Broadway Pizza (S.F.)

Common law rights

• Geographic priority determined by (1) 1st use in a given geographic area, (2) customer associations in that area

• Key: both users can expand geographic areas unless it causes confusion

Common law parallel use, followed by registration

• Can give rise to a concurrent use registration

• BOTH parties entitled to use marks in certain geographic areas

[I]f the Commissioner determines[no likelihood of confusion from use in

different geographic areas] concurrent registrations may be issued to such persons when they have become entitled to use such marks as a result of their concurrent lawful use in commerce prior to (1) the earliest of the filing dates of the applications pending or of any registration issued under this Act. Lanham Act § 2(d), 15 USC § 1052(d).

•Weiner King, Inc. v. Wiener King Corp., 615 F.2d 512 (C.C.P.A. 1980)

Limited area defense allows the non-registering party to claim priority in those geographic areas where he has made continuous use of the mark since before the registering party filed her application. The non-registering party is ‘‘frozen’’ in the use of his mark, however, and cannot expand it outside his existing territory or a natural ‘‘zone of expansion.’’ See Weiner King, Inc. v. Wiener King Corp., 615 F.2d 512 (C.C.P.A. 1980).

Key: Senior party gains constructive national rights

• One of the greatest benefits of federal registration

• Constructive national use gained from (1) “use in commerce” (minimal) plus (2) federal registration

Dawn Donut v. Hart’s, 267 F2d 358 (2d Cir 1959)

State registration; common law use

• Zazu’s state registration here: for services, not goods

– “Trade name” vs. state TM register

• What if Zazu had had a state registration for goods? Constructive use throughout state?

TM Office procedures

• Registration: Principal vs. Supplemental Register

• Incontestability: Only for marks on the Principal Register

• Oppositions, Interferences, Cancellation

Benefits of federal registration

• Constructive national use

• Incontestable after 5 years (eliminates some important defenses in TM suits)

• Customs enforcement; treble damages + attorneys fees possible

Grounds for rejecting registration

• Immoral or Scandalous matter

• Changing standards over time

• Problem 5-5: Washington Redskins case

Disparaging Marks

• Sec. 1052 (Lanham Act sec. 2). Trademarks Registrable on Principal Register; Concurrent RegistrationSec. 1052 (Lanham Act sec. 2)

• “No mark [capable as serving as a TM] may be denied registration unless . . .”

Sec. 2(a); 15 USC 1052(a)

(a) Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute;

General Public; General Associations

First Amendment Rights

• Why not strongly implicated?

• Is a TM an aspect of a right to speak freely?

– Protecting the speaker – vs. protecting the listener’s associations

Current status of Harjo

Professional Football, Inc. v. Harjo, 565 F.3d 880 (D.C. Cir. 2009) (upholding district court finding of laches – mark in use for over 30 years before challenge brought).

Compare: Harjo v. Pro-Football, Inc., 50 U.S.P.Q.2d 1705 (T.T.A.B. 1999) (original action: mark ordered to be cancelled from register)

Sec. 2(e); 15 USC 1052(e)(e) Consists of a mark which (1) when used on or in

connection with the goods of the applicant is merely descriptive or deceptively misdescriptive of them, (2) when used on or in connection with the goods of the applicant is primarily geographically descriptive of them, except as indications of regional origin may be registrable under section 1054 of this title, (3) when used on or in connection with the goods of the applicant is primarily geographically deceptively misdescriptive of them,

“I registered ‘Nantucket’ and all I got was this lousy t-shirt”

Nantucket holding

• TTAB refusal to register mark – on grounds that it was primarily geographic

• TMEP: mark is geographic if “goods are known to emanate from” that location

• A species of “descriptiveness”; also somewhat like generic marks

Examples

• Wisconsin cheese

• Washington apples

• Milwaukee bratwurst

Geographically deceptively misdescriptive

• “Cuban” brand cigars – made in New Hampshire

• “Napa” brand wine – grapes grown in Stockton

Two related issues

• Primarily geographically descriptive

• Primarily geographically misdescriptive

• Why are both bad (as TM’s)?

Apellations of Origin

Lanham Act § 2(a) – “wines or spirits” only

Certification marks: eg, Roquefort

Surnames

“Why Can’t I Use Me Own Name?”

Incontestability

• Statute

• Rationale

• Park n’Fly Case

Park n’Fly Sues “Dollar Park n’Fly”

Dollar’s defenses

• Mark is generic; or merely descriptive; privity with senior user; no likekihood of confusion

• P. 709

INCONTESTABILITY: Except on a ground for which application to cancel may be filed at any time under paragraphs (3) and (5) of section 1064 of this title, and except to the extent, if any, to which the use of a mark registered on the principal register infringes a valid right acquired under the law of any State or Territory by use of a mark or trade name continuing from a date prior to the date of registration under this chapter of such registered mark, …. § 15, 15 USC §1065

[T]he right of the owner to use such registered mark in commerce for the goods or services on or in connection with which such registered mark has been in continuous use for five consecutive years subsequent to the date of such registration and is still in use in commerce, shall be incontestable: Provided, That—

§15 cont’d

(1) there has been no final decision adverse to the owner’s claim of ownership … and

(2) there is no proceeding involving said rights pending in the United States Patent and Trademark Office or in a court and not finally disposed of; and

(3) an affidavit is filed with the Director within one year after the expiration of any such five-year period setting forth [that] such mark has been in continuous use for such five consecutive years and is still in use in commerce, and

(4) [Not generic] -- § 15

(3) At any time if the registered mark becomes the generic name … or has been abandoned, or its registration was obtained fraudulently or contrary to the provisions of section 1054 of this title or of subsection (a), (b), or (c) of section 1052 of this title [immoral, flag symbol, living individual] for a registration under this chapter, … or if the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used … § 14

(5) [special provisions re: cancellation of certification marks]

§ 14, 15 USC § 1064

Incontestability: sec. 33(a), 15 USC 1115

• “Prima facie evidence” of ownership, validity, use

• § 33(b): Incontestability; Defenses

(b) Incontestability; defenses. To the extent that the right to use the registered mark has become incontestable under section 1065 of this title, the registration shall be conclusive evidence of the validity of the registered mark and of the registration of the mark, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered mark in commerce.

Such conclusive evidence shall relate to the exclusive right to use the mark on or in connection with the goods … specified in the affidavit. Such conclusive evidence of the right to use the registered mark shall be subject to proof of infringement as defined in section 1114 of this title, and shall be subject to the following defenses or defects:

Defenses that Survive Incontestability

1. Obtained by Fraud2. Abandonment3. Used to Misrepresent source or origin4. Fair Use (descriptive marks only)5. Prior 3rd party rights (e.g., concurrent use)6. Prior registered mark7. Functional (since 1998 – 1064(3))

§ 33(b) (1) – (9)

Additional Defenses always available

1. Antitrust, equitable defenses (laches, etc.)

2. Mark is generic (sec. 14(c), 15 USC 1064 (c))

Sup Ct

The approach adopted by the Court of Appeals implies that incontestability adds nothing to the protections against cancellation already provided in §14. The decision below not only lacks support in the words of the statute; it effectively emasculates §33(b) under the circumstances of this case.

IPNTA 5th at 812

Policy

• The right to challenge marks that become generic is enough to prevent the harm to competition that the Court of Appeals (and the dissent) are worried about.

• IPNTA 5th at 813.

Word Mark PARK 'N FLY Goods and Services IC 039. US 105. G & S: VEHICULAR PARKING ADJACENT AIRPORTS Serial Number 73153231 Filing Date December 23, 1977 Registration Number 1111956 Registration Date January 23, 1979 Owner (REGISTRANT) PARK'N FLY, INC. CORPORATION MISSOURI THE PLAZA

Live/Dead Indicator LIVE

TMEP - http://tess2.uspto.gov/tmdb/tmep/

1605.04 Requirements for Affidavit or Declaration of Incontestability

Section 15 of the Act refers to the affidavit or declaration merely as “setting forth” the specified information. See 15 U.S.C. §1065(3). Therefore, no showing or proof beyond the owner’s verified statement is required.

servletSpecimen2009012373153231SPEfromCurrenull11

Offensive vs. Defensive Use of Incontestability

• Defensive: Like Park n’ Fly: protect against certain otherwise available defenses

• Offensive: In some circuits, automatic proof that mark is “strong”

– In others, no . . .