Trademark infringement involves the unauthorized use of someone’s trademark or service mark on or in connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source, sponsorship, affiliation, or approval of the goods and/or services. In our final module, we’ll look at the bases for infringement claims, defenses and remedies.
Claims of Infringement
Courts typically use the “likelihood of confusion” test to determine whether trademark infringement has occurred. Let’s break this down into a few elements.
First, the trademark owner must establish that it owns a valid trademark. If the trademark has been registered with the US Patent and Trademark Office, a presumption arises that the mark is valid and owned by the person listed on the registration. If the trademark has been transferred to a new owner, the new owner must provide evidence of the transfer. If the trademark has been licensed, the licensee must prove that the agreement includes the right to sue for infringement.
The presumption of ownership and validity can be challenged by the defendant. If the trademark has been in use for more than five years and the owner has filed an affidavit of continuous use, the mark becomes “incontestable.” Even in such a case, though, the defendant can challenge validity if the defendant can establish fraud in obtaining the mark, abandonment of the mark or misrepresentation in using the mark.
Note that a trademark does not have to be registered for the owner to sue for infringement. In the mark is unregistered, the owner must establish ownership of the mark and must also establish validity. Validity requires that the mark is inherently distinctive; in other words, that the mark is suggestive, arbitrary or fanciful. If the mark is merely descriptive, then the owner must establish validity by proving that the mark has acquired a secondary meaning.
As the second element in a trademark infringement lawsuit, the owner must establish that someone else used the mark on or in connection with goods or services. The allegedly infringing mark does not necessarily have to be identical to the plaintiff’s mark, but it must be sufficiently close to cause a likelihood of confusion.
For the third element in a trademark infringement lawsuit, the owner must prove that the use was without the owner’s consent.
Fourth, the owner must establish a likelihood of confusion. When the plaintiff’s and defendant’s goods or services are in direct competition, there is likelihood of confusion if the marks are sufficiently similar. If the parties are not direct competitors, but if the goods or services are related, then several other factors are relevant to determining likelihood of confusion. These factors include the strength of the mark, the proximity of the goods, the similarity of the marks, evidence of actual confusion, the marketing channels used, the types of goods, the degree of care likely to be exercised by the purchaser, the defendant’s intent in selecting the allegedly infringing mark and the likelihood of the expansion of product lines. Let’s look at these factors individually.
The strength of the mark depends on its level of distinctiveness. The more distinctive the mark, the easier it is to show likelihood of confusion.
The proximity of the goods refers to whether the goods are in the same geographical and price markets. The more likely the public is to make such an association, the less similarity in the marks is required to a finding of likelihood of confusion.
The similarity of the marks is determined based on sight, sound, and meaning as used in connection with the goods or services. Obviously, the more similar the marks, the greater chance of likelihood of confusion. Additionally, evidence that the use of the two marks has already led to confusion is persuasive in showing the likelihood of future confusion. Trademark litigants often retain outside companies to conduct public surveys in order to establish, or disprove, whether actual confusion has occurred.
Another factor supporting likelihood of confusion involves whether the goods are sold in the same marketing channels. Courts also weigh the sales methods that are used, including price ranges and advertising methods.
The types of goods, and the degree to which purchasers care about the source of the goods, also factor into the likelihood of confusion analysis. The general standard is whether a typical buyer of the goods, exercising ordinary caution, would be confused. When goods are expensive, buyers are expected to exercise greater care in purchases and are, therefore, somewhat less likely to be confused.
The defendant’s intent in using the allegedly infringing mark can also factor into the analysis. When the infringer knowingly adopts a mark similar to another’s, courts may presume that the infringer intended to deceive the public regarding the source of the goods or services.
Finally, the likelihood of expansion should be considered. If the parties are not direct competitors, but if there is a strong possibility that one will expand to compete with the other, then this possible expansion weighs in favor of finding a likelihood of confusion with the present use.
Even if there is no likelihood of confusion — and, hence, no trademark infringement — an owner of a famous, distinctive trademark can obtain an injunction against any use that is likely to cause dilution of the famous mark. Unlike most trademark infringement matters, dilution typically occurs between products or services in unrelated markets, where the products or services do not compete with each other.
A mark is famous if it is widely recognized by the general consuming public as a designation of source of the goods or services of the mark’s owner. Relevant factors include the duration, extent and geographic reach of advertising and publicity for the mark; the volume of sales; the extent of actual recognition; and whether the mark is registered. For example the mark The Sporting News was found to be famous in the sports periodicals market, and the mark Coach was found to be famous in the handbag market, but the mark Avery Dennison was not found to be famous. Litigants may conduct or commission customer surveys to establish or rebut an allegation that a mark is famous.
Trademark dilution can take two forms — blurring or tarnishment.
Dilution by blurring involves an association arising from the similarity between a famous mark and the defendant’s mark that impairs the distinctiveness of the famous mark. The following are relevant factors: the degree of similarity between the marks, the degree of distinctiveness of the famous mark, the extent to which the owner of the famous mark is exclusively using it, the degree of customer recognition of the famous mark, the defendant’s intent in using the mark and any actual association between the marks.
For example, dilution may be found if someone tried to market Rolls Royce shoes, Buick aspirin or Kodak pianos.
Dilution by tarnishment is an association arising from the similarity between a defendant’s mark and a famous mark that harms the reputation of the famous mark. For example, the producers of “Ben & Cherry’s adult videos” were sued for tarnishing the reputation of Ben & Jerry’s ice cream (the case settled). And in a case that made it all the way to the Supreme Court and then back to the Sixth Circuit, an adult novelty store named “Victor’s Little Secret” was found to dilute the Victoria’s Secret trademark. As detailed in that case, several other courts have held that a famous mark is tarnished when it is semantically associated with a new mark that is used to sell sex-related products. Examples include Barbie pornography, an adult entertainment club named the Polo Club and a sexually-oriented variation of the Pillsbury Doughboy.
Several types of trademark use are not actionable as dilution. These include news reporting, news commentary and other noncommercial use of the mark. We will explore these concepts next.
Trademark Fair Use
While often associated with copyrights, the unauthorized use of someone else’s trademark may be permissible due to the “fair use” defense. There are two types of fair use: nominative fair use and descriptive fair use. Nominative fair use involves referring to the trademark owner’s goods or services in such a way that it does not imply sponsorship or endorsement. For example, a cellular phone case manufacturer can indicate that its cases are for use with iPhones, and an auto mechanic specializing in Porsche repairs is allowed to advertise her business as servicing Porsche cars. To qualify as nominative fair use, the use cannot be misleading or defamatory; the use must not imply any endorsement or sponsorship by the trademark owner; and there should not be a better way to refer to the owner or its products. In addition, only so much of the trademark can be used as is needed to identify the trademark owner, which typically means that only words can be used, not logos.
Descriptive fair use involves the use of a famous trademark to describe another user’s products or services. This typically occurs when using the trademark for its common, descriptive meaning. For example, use of the term the inhibitor by WD-40, a corrosion-inhibiting product, is descriptive fair use of another company’s registered trademark (another person had registered “The Inhibitor” years earlier). As another example, the use of the word sweet-tart to describe the flavor of a juice drink is fair use and not an infringement of the sweet tarts candy trademark. As you can see, owners of descriptive trademarks are often vulnerable to the descriptive fair use defense in litigation.
Nominative fair use often arises in the comparative advertising context, when a company compares its goods or services to those of a trademark owner’s. All of the nominative fair use factors must be present, including the requirement that the use not be misleading, defamatory or imply any sponsorship by the trademark owner. For example, the Pepsi challenge permissibly compared Pepsi with Coke, and Hertz and Avis can and do mention each other in their ads.
Trademark fair use also includes parodies, criticisms, and commentaries regarding the owner of a famous mark, or the subject goods and services. A parody involves the juxtaposition of a famous mark against some irreverent variation of the mark. For example, the use of “Lardashe” jeans for larger women was found to be a permissible parody of Jordache jeans, and dog chew toys resembling small Louis Vuitton handbags could use the name “Chewy Vuiton.”
Similarly, a person or company is allowed to criticize or comment regarding another owner’s trademarked goods or services. To qualify as fair use, such criticism or commentary cannot be misleading or defamatory, and the use must not imply any endorsement or sponsorship by the trademark owner.
Additionally, all forms of news reporting and commentary are exempt from trademark dilution claims. Some courts have extended this protection to internet postings, including a blogger who wrote critical commentary regarding an Ebay reseller.
Dilution claims only apply to commercial use of a mark; noncommercial use is specifically exempt. Noncommercial use generally means use that is not connected with the sale of goods or services. An example of noncommercial use would be a website created to complain about a trademark holder’s salesmen, where the site had no business purpose.
The First Amendment’s freedom of speech guarantee can also trump trademark law in certain situations. Another person’s trademark can be used in an expressive work — including entertainment, dramatic, literary, artistic and musical works — unless the use has no artistic relevance to the underlying work, or unless it explicitly misleads as to the source or content of the work. In addition, another person’s trademark can be used in advertising for an expressive work. For example, Twentieth Century Fox was allowed to use another person’s trademark, Empire, as the name of a television show and related soundtrack. In addition, under the guise of advertising, the studio was allowed to use the Empire mark in conjunction with live musical performances and consumer goods.
Under both federal and state law, a trademark owner is entitled to sue for infringement of an unregistered mark. If successful, the owner can obtain an injunction against the infringing use. In addition, owners of unregistered marks cannot obtain actual damages (including lost profits) or attorney’s fees. The owner of a famous unregistered mark can also sue for trademark dilution where applicable.
However, unregistered marks are only enforceable within the geographic regions where the trademark owner is conducting business. Thus, if a restaurant chain is using your unregistered Bojangles mark throughout the U.S., but you only use the mark in Alaska and Hawaii, you cannot stop the unauthorized use in the continental United States.
Injunctions are standard remedies in trademark infringement actions. Courts have the discretion to enjoin all use of a mark or to limit the use to particular goods, channels of trade or geographical regions. The owner of a famous mark who establishes trademark dilution is also entitled to an injunction.
Many plaintiffs seek preliminary injunctions at the outset of litigation. The factors weighed by the courts on whether to issue injunctions at these points are (1) plaintiff’s likelihood of success on the merits, (2) the existence of irreparable injury to the plaintiff, (3) the respective hardship that the court’s grant or denial will have to each party, and (4) the public interest.
The owner of a registered trademark who establishes infringement is entitled to recover the defendant’s profits, any damages sustained by the owner and the costs of the action. The owner of a famous mark who establishes willful trademark dilution is entitled to the same damages. Willful dilution by blurring involves willfully intending to trade on the recognition of a famous mark, while willful dilution by tarnishment involves willfully intending to harm the reputation of a famous mark.
Actual damages can be based on negative outcomes such as reduced sales or injury to business reputation. To obtain actual damages, the plaintiff must prove actual customer confusion. This can be shown by direct evidence, such as direct testimony from members of the public, by proof of sales diversion or by circumstantial evidence such as customer opinion surveys before and after the offending use.
The plaintiff may also be awarded the defendant’s profits generated by the offending use. The plaintiff only has to show evidence of the defendant’s gross sales, and the defendant bears the burden of establishing the proper deductions to calculate what was earned as a result of the offending use. Courts are entitled to increase damages by up to three times and, in exceptional cases, courts can award attorneys’ fees to the prevailing parties.
However, to receive any of these damages, the trademark owner must provide notice of trademark registration. Such notice can be provided by statutory notice — displaying the letter R enclosed within a circle when using the mark — or by establishing that the defendant had actual notice of the registration.
Thank you for participating in LawShelf’s video-course in trademark law. We hope that you now understand the basics of trademarks, how to secure them and what constitutes infringement. We also encourage you to take advantage of our other intellectual property courses. Best of luck and please let us know if you have any questions or comments.
 https://www.uspto.gov/page/about-trademark-infringement; 15 U.S.C. § 1125(a)(1)(A)
 15 U.S.C. § 1115(a)
 15 U.S.C. § 1115(b)
 Taco Cabana Int’l, Inc. v. Two Pesos, Inc., Int’l Inc., 932 F.2d 1113 (5th Cir.1991)
 AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 349 (9th Cir. 1979).
 AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 350 349 (9th Cir. 1979).
 AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 352 349 (9th Cir. 1979).
 15 U.S.C. § 1125(c)(1)
 15 U.S.C. § 1125(c)(2)(A)
 Times Mirror Magazines Inc. v. Las Vegas Sports News, 212 F.3d 157, 165 (3d Cir. 2000)
 Coach, Inc. v. We Care Trading Co., Inc., 67 Fed. App’x. 626, 630 (2d Cir. 2002)
 Avery Dennison Corp. v. Sumpton, 189 F.3d 868, 874 (9th Cir. 1999)
 15 U.S.C. § 1125(c)(2)(B)
 15 U.S.C. § 1125(c)(2)(B)
 V Secret Catalogue, Inc. v. Moseley, 605 F.3d 382, 388 (6th Cir. 2010)
 15 U.S.C. § 1125(c)(3)(B)
 15 U.S.C. § 1115(b)(4)
 15 U.S.C. § 1125(c)(3)(A)(ii)
 Jordache Enterprises, Inc. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1486 (10th Cir.1987)
 Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252, 256 (4th Cir. 2007)
 15 U.S.C. § 1125(c)(3)(B)
 BidZirk, LLC v. Smith, 2007 WL 3119445 (D.S.C. Oct. 22, 2007).
 15 U.S.C. § 1125(c)(3)(C)
 Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 676 (9th Cir. 2005)
 TMI Inc. v Maxwell, 368 F3d 433 (5th Cir. 2004)
 Rogers v. Grimaldi, 875 F.2d 994, 999 (2d Cir. 1989)
 Twentieth Century Fox Television v. Empire Distribution, Inc., 875 F.3d 1192, 1196-97 (9th Cir. 2017).
 15 U.S.C. § 1125(a)
 15 U.S.C. § 1116
 15 U.S.C. § 1125(c)(1)
 15 U.S.C. § 1117(a);
 15 U.S.C. § 1117(a); 15 U.S.C. § 1125(c)(5)
 15 U.S.C. § 1125(c)(5)(B)
 15 U.S.C. § 1117(a)
 15 U.S.C. § 1111