1 Trademark Infringement and Dilution Steve Baron March 6, 2003

2 What is a trademark Infringement?  Senior  Senior user owns mark  Junior  Junior user begins to use the same or similar mark on the same or similar goods or services  Likelihood  Likelihood of confusion in market

3 Who is the law protecting?  Consumers The public’s right not to be confused The public’s right not to be confused  Mark owners The right to develop brand awareness The right to develop brand awareness The right to prevent free-loaders from trading on the mark owner’s good will and reputation in the market place The right to prevent free-loaders from trading on the mark owner’s good will and reputation in the market place

4 What law applies What law applies  Federal Statutes The Lanham Act The Lanham Act 15 U.S.C. §§ U.S.C. §§ U.S.C. §§ U.S.C. §§  State Statutes Counterfeit Trademark Act Counterfeit Trademark Act 765 ILCS ILCS htm htm htm htm  Judicial Decisions

5 Lanham Act  (1)  Any person who shall, without the consent of the registrant -  (a)  use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive; or

6 Lanham Act  (b) reproduce, counterfeit, copy, or colorably imitate a registered mark and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive,

7 Lanham Act  shall be liable in a civil action by the registrant for the remedies hereinafter provided. Injunction Injunction Defendant’s profits Defendant’s profits Plaintiff’s damages Plaintiff’s damages Costs Costs Attorney’s fees (if infringement willful) Attorney’s fees (if infringement willful)

8 Likelihood of Confusion Factors  Similarity of the Marks  Similarity of the Products  Area and Manner of Concurrent Use  Degree of Care Exercised by Consumers  Strength of Plaintiff’s Mark  Actual Confusion  Intent of Defendants

9 Types of Confusion  Forward Small Junior trades off of Big Senior User Small Junior trades off of Big Senior User  Reverse Big Junior saturates market and overwhelms Small Senior User Big Junior saturates market and overwhelms Small Senior User  Initial Interest Confusion that creates an initial customer interest (e.g. meta-tags, domain names) Confusion that creates an initial customer interest (e.g. meta-tags, domain names)  Post-Sale Confusion of someone other than purchaser Confusion of someone other than purchaser

10 Anticybersquatting Consumer Protection Act (ACPA)  Enacted in 1999  Addresses the problem of domain name hi-jackers

11 Liability Under ACPA  Bad faith intent to profit from mark  Register, traffic in or use a domain name that:

12 Liability Under ACPA  (I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;  (II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or  (III) is a trademark, word, or name protected by reason of section 706 of title 18 or section of title

13 “Bad Faith” Elements under ACPA  (I) the trademark or other intellectual property rights of the person, if any, in the domain name;  (II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;  (III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services;

14 “Bad Faith” Elements under APCA  (IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name;  (V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site;

15 “Bad Faith” Elements under APCA  (VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct;

16 “Bad Faith” Elements under APCA (VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct;

17 “Bad Faith” Elements under APCA (VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct;

18 Bad Faith” Elements under APCA  (VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and

19 “Bad Faith” Element under APCA  (IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c)(1) of this section.

20 Trademark Dilution  Lessening of a famous mark to identify and distinguish goods and services  Irrespective of: Competition between owner of mark and other parties; or Competition between owner of mark and other parties; or Likelihood of confusion, mistake or deception Likelihood of confusion, mistake or deception

21 Trademark Dilution  “Blurring” distinctiveness of mark  “Tarnishing” reputation of mark

22 Moseley v. V. Secret Catalogue  Plaintiff (Respondent) = Victoria Secret  Defendant (Petitioner) = Mosely  Facts: P owns famous mark, VICTORIA’S SECRET P owns famous mark, VICTORIA’S SECRET D opens shop in Kentucky, VICTOR’S SECRET D opens shop in Kentucky, VICTOR’S SECRET D changes name to “Victor’s Little Secret” D changes name to “Victor’s Little Secret” Sell’s intimate lingerie, adult films and novelties etc.Sell’s intimate lingerie, adult films and novelties etc.

23 Moseley v. V. Secret Catalogue  P sues D for trademark infringement and trademark dilution  P loses infringement claim but wins dilution claim in lower court  Supreme Court grants cert to determine whether FTDA requires proof of actual dilution or whether likelihood of dilution is sufficient

24 Moseley v. V. Secret Catalogue  Who wins? The Little Guy! The Little Guy!  Supreme Court holds that Victoria Secret must submit proof of actual dilution and that there is insufficient evidence in the record to show actual dilution  Case reversed and remanded

25 Moseley v. V. Secret Catalogue  So, now what? How to prove dilution? How to prove dilution? Surveys, experts…?Surveys, experts…? Legislative intervention? Legislative intervention?

26 Quote of the Day  “Every law has a loophole” Proverb, unknown author Proverb, unknown author