Association of Corporate Counsel October 6, 2017 Welcome to Trademark Enforcement: Is Your Mark a Marshmallow or a Rock? Glenn Johnson Nyemaster Goode, P.C.

Recognized in The Best Lawyers in America® for work in: GLENN JOHNSON is a Registered Patent Attorney with experience representing clients in technical and complex litigation in the areas of intellectual property, commercial and business disputes, and employment law. Recognized in The Best Lawyers in America® for work in: Commercial Litigation Copyright Law Litigation-Intellectual Property Litigation-Patent Patent Law T: (319) 286-7002 F: (319) 286-7050 E: gjohnson@nyemaster.com 625 First Street SE, Suite 400 Cedar Rapids, IA 52401 (319) 286-7000

What is a trademark?

What is a trademark? Used by a person Which identifies and distinguishes his or her goods from those sold by others Indicates the source of the goods

How are trademark rights acquired? Use in Commerce Interstate commercial use required for protection under the federal Lanham Act Common Law - geographic markets where the mark is used State Registration - protects in the boundaries of the state Federal Registration - national protection against subsequent users: prerequisite is use in interstate commerce

Primary Functions of Trademarks To distinguish goods and identify their source To assure consumers obtain the quality of goods/services they expect To advertise and promote products

Goodwill The Essence of a Trademark Trademark law recognizes a trademark as intangible asset used to communicate information to the market about the owner and its goods/services with the underlying goal to prevent others from using similar marks to deceive or confuse consumers

Trademark Value Kantar Millward Brown BrandZ Top 100 Most Valuable Global Brands 2017 http://www.millwardbrown.com/brandz/top-global-brands/2017 Top 100 brands increased in value by 8 percent year-on- year to now be worth $3.64 trillion The dominate brands are: Google, Apple, Microsoft, Amazon and Facebook which represent 25% of the total value of the Top 100

Trademark Value Brands and the corresponding goodwill are impacted not only by the quality of goods and services, but also by commercial conduct. What impact will the recent collegiate fraud and bribery scandal have upon Adidas brand value?

Trademark Value

Trademark Value Over the past 12 years, the value of the Top 10 increased 249 %, while the Top 100 increased 152 % Over the past 12 years, the value of the Top 10 as a proportion of the total Global Top 100 value increased from 28 % to 39 % The Top 10 in 2017 are worth around the same as the entire Top 100 12 years ago—$1.4 trillion

Benefits of Federal Registration of a Trademark Enhances exposure within trademark databases to facilitate prevention of another adopting a confusingly similar mark.

Benefits of Federal Registration of a Trademark Provides readily accessible “prior use” information. The Applicant has a duty of candor to advise the USPTO of prior use information for related goods/services. The Trademark Examiner conducts searches of the USPTO database and holds a duty to cite prior registrations against an application and reject registration.

Related Goods & Services The goods of the parties need not be identical or directly competitive to find a likelihood of confusion. See Safety-Kleen Corp. v. Dresser Industries, Inc., 518 F.2d 1399, 1404 (Fed, Cir. 1975); TMEP § 1207.01 (a)(i). Rather, they need only be related in some manner, or the conditions surrounding their marketing are such that they would be encountered by the same purchasers under circumstances that would give rise to the mistaken belief that the goods come from a common source. See Online Careline Inc. v. Am. Online Inc., 229 F.3d 1080, 1086-87 (Fed. Cir. 2000); TMEP § 1207.01(a)(i).

Benefits of Federal Registration of a Trademark Complete geographic coverage within the US. The Application provides a priority date for first use in commerce which covers the US even if the interstate commercial use was much more restricted at the time of filing.

Benefits of Federal Registration of a Trademark National notice. Registration operates as legal notice of ownership of the mark as of the registration date, preventing others from claiming their subsequent adoption of the mark was in “good faith”.

Benefits of Federal Registration of a Trademark Registration provides a legal presumption of both the validity and the exclusive ownership of the trademark for the goods/services denoted.

Benefits of Federal Registration of a Trademark After registration, if no conflicting uses by 3rd parties arise during the first five years of trademark use, the owner may obtain “incontestable” status for the trademark which enhances the enforcement power and eliminates certain defenses to a claim of trademark infringement.

Benefits of Federal Registration of a Trademark Legally confers upon the owner the right to use the ® symbol which operates to provide an increased view of the market that the brand is stable and recognized by the federal government, and the owner is serious about protecting rights.

Benefits of Federal Registration of a Trademark Enhances potential damages and claims for attorney’s fees in a trademark infringement enforcement proceeding thereby providing the owner with enhanced leverage in preventing 3rd party uses that either infringement or potentially encroach upon the trademark or its likely expanded use by the owner.

Benefits of Federal Registration of a Trademark In the case of a counterfeit use of the trademark, registration allows the owner to seek statutory damages and not have to prove actual damages in order to recover.

Benefits of Federal Registration of a Trademark Provides a basis for foreign registrations to enhance and facilitate worldwide protection of the trademark.

Categorization of Strength The Lanham Act recognizes, and authorizes the USPTO to register eligible trademarks on, two separate and very different “registers”: Subchapter I of the Lanham Act governs trademarks placed on the Principal Register Subchapter II of the Lanham Act governs trademarks placed on the Supplemental Register The Principal Register and the Supplemental Register separate strong marks from weak marks

Registration Strength

Categorization of Strength Principal Register Strong marks are registered on the Principal Register and are fully capable of trademark significance at the time of registration.

Categorization of Strength Categories of strong marks, in descending order of strength: Fanciful Marks “Coined” or invented terms Arbitrary Marks Ordinary, everyday terms that are appropriated for products having no relation whatsoever to the term Suggestive Marks Hint at, but do not describe, the product for which they are used

Categorization of Strength A weak mark that becomes strong: Descriptive mark that has obtained secondary meaning

Categorization of Strength Supplemental Register Weak marks do not initially have trademark significance, except that use in commerce sets the priority date and begins the maturation process. Descriptive Marks Descriptive of the goods or services for which they are proposed to be used and are registrable on the Supplemental Register

Generic Terms Need Not Apply Generic marks consist of words that are the common name for the products or services with which they are being used and are not registrable on the Principal or Supplemental Register under any circumstances OR Trademarks that have become generic through the ordinary use and understanding of the consuming public Whether registered or not, a trademark should never be used in a generic sense, particularly by its owner in reference to covered goods/services.

Generic Terms Need Not Apply The mark should be used to modify the generic noun, such as KLEENEX facial tissue or BANDAID adhesive bandage. One effective method of distinguishing the brand from the generic product is to use the term “brand” following the mark: KLEENEX brand facial tissue. If the trademark becomes a descriptive part of the English language, a fate that befell the onetime marks CELLOPHANE, ESCALATOR, and ASPIRIN, it is said to have become genericized. Elliott v. Google, Inc., No. 15-15809 (9th Cir., May 16, 2017).

Generic Terms Need Not Apply Affirmative Advertising to Prevent Genericide https://youtu.be/rRi8LptvFZY https://youtu.be/rRi8LptvFZY?list=RDrRi8LptvFZY

Supplemental Register Benefits & Limitations Supplemental Registration does not serve as evidence in court of the owner’s exclusive right to use the mark or of the mark’s validity. Supplemental registration does allow the Trademark Office to block subsequently filed applications for confusingly similar marks. Supplemental registration does make ownership of the mark of record, so that others who conduct searches seeking in good faith to minimize trademark problems can easily find the mark.

Supplemental Register Benefits & Limitations Supplemental registration does entitle the owner to use the ® symbol. Once the mark has “acquired distinctiveness,” a new application can be filed with the USPTO seeking registration of the mark on the Principal Register.

Secondary Meaning/ Acquired Distinctiveness In re Owens-Corning Fiberglas Corp., 774 F.2d 1116, 1125 (Fed. Cir. 1985) “An evidentiary showing of secondary meaning, adequate to show that a mark has acquired distinctiveness indicating the origin of the goods, includes evidence of the trademark owner’s method of using the mark, supplemented by evidence of the effectiveness of such use to cause the purchasing public to identify the mark with the source of the product.”

Enforcement Policing of Trademarks & Usage in Commerce Owners Responsibility Involves Many Potential Strategies Opposition/Cancellation of 3rd Party Registration – TTAB of the USPTO Cease & Desist Letters Concurrent Use Agreements Covenant Not to Sue – Already, LLC v. Nike, Inc., 133 S. Ct. 721 (2013). Licensing Litigation

Enforcement Impact of Benign Neglect Ignoring improper uses – erosive effect Lack of follow-through – knowing disregard

Trade Dress and Design Patents Hand-in-Glove Approach with Trademarks Trade Dress – covers packaging & retail outlet design Design Patents – “Ornamental” – cover three-dimensional characteristics of the goods

Conclusion Actual Mark Duration of Use Actual Use by Owner Lack of Encroachment by 3rd Parties Control of 3rd Parties Perception of Consuming Public

QUESTIONS?

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