Trademark & Trade Dress Litigation

An unauthorized third party’s use of trademarks and trade dress can be tantamount to significant losses. Protection may be available even if trademarks or trade dress are not registered with the United States Patent and Trademark Office.  A company may find out someone has been using its trademark to sell their goods causing customers to be confused as to whose products they are buying. In other cases a company may be accused on such infringement but believes the accuser is staking a claim for protection that it is not entitled to. In trademark and trade dress litigation, the three main claims are trademark infringement, unfair competition and trademark dilution. 

Trademark infringement occurs when third-party’s use of a trademark would likely confuse consumers as to the producer of a product or service. To win, the owner must show that

A. it is the owner of a validly and legally protectable mark, and 

B. the alleged infringer’s use of the mark in commerce causes a likelihood of confusion about the source of goods or services. 

This “likelihood of confusion” is the primary focus of an infringement claim. 

Courts typically consider the following factors: 

A. the similarity of the marks 

B. the proximity of the goods or services of the plaintiff and defendant

C. the strength of the owner’s mark

D. the similarity of marketing and advertising channels used

E. the amount of care a consumer is likely to use before making a purchase; 

F. evidence of actual confusion; 

G. the alleged infringer’s intent in choosing the mark.

Trademark analysis (prior to usage)

Before investing a great deal of time and money into marketing a product, a company must first settle on trademarks that are both likely to help capture the attention of consumers, but are also protectable. For example, a company that manufactures hand tools may believe it will attract a great deal of attention by calling a line of products “Strong & Smart Hand Tools”. However, a name such as this is probably not protectable because it is merely descriptive or even generic. Or if a name is picked but then it turns out a competitor uses a very similar sounding name, again, this name may have to be abandoned. Therefore, conducting availability searches and analysis for trademarks before adopting them for usage in the market is likely to result in the selection of a far more protectable name, while minimizing future claims of infringement.

Trademark Registration & Office Actions

In order to maximize protection over these valuable assets in the first place, trademarks should be registered with the United States Patent and 

Trademark Office. At times, during registration, the USPTO may issue an “office action” either denying the trademark or requiring additional documentation concerning the application. At times, applications can be faced with challenges from other companies urging the USPTO to reject the registration. Other times, a third-party may file a complaint with the USPTO claiming that a previously registered trademark was obtained under false pretenses. These also require planned & strategized responses.

Licensing & Franchising

Licensing a trademark or trade dress to third-parties may prove to an excellent source of revenue for the owner of an established trademark or trade dress. However, this requires careful planning because the failure to take proper precautions in both writing and practice can lead to an utter loss of protection, considered to be “abandonment” of the trademark or "naked licensing.” Ownership of a trademark requires a certain level of vigilance. Protection under the law is afforded to those who regularly prevent others from infringing on their trademarks. Similarly, if a trademark owner simply allows a third-party to use its trademarks in exchange for a fee, but does not exercise any level of quality check over the user, this lack of control can lead to losing the ownership of the trademark.

Licensing of trademarks also can cause other unintended problems unless carefully planned. In contrast to the problem highlighted above, exercising too much control over the licensee can cause the relationship to inadvertently become a franchise relationship. Because franchising is a regulated practice, the unwitting licensor of a trademark can find itself violating state and federal franchise laws without ever having intended or contemplated being a franchisor. Therefore, the owner of a trademark must first understand whether the licensing it wishes to engage in is going to cross into the sphere of franchising and then take its next steps strategically to address such a reality.

Confidentiality Clauses in Agreements

A company should protect its intellectual property (such as internal sales data, client records, company strategies, designs, recipes, etc.) in agreements such as Employment, Distribution, Joint Venture Agreements, as well as though company policies. Without such language, a company may have left some of its most valuable assets, its intellectual property free for others to take, with little to no consequence. Whether dealing with employees, distributors, sales agents, licensees or joint venturers, a business must make sure the extent of the relationship is memorialized in signed agreements and that these agreements very clearly define the extent of protection in regards to intellectual property.