1. Trademark/ Service Mark Issues For Public Power Utilities APPA LEGAL SEMINAR November 15, 2005 Brian E. Banner Washington, D.C. Bebanner@comcast.net © Brian E. Banner 11/15/2005

2. Change is good. We come to these types of meetings to learn about changes in the law and the world around us. Your business changes, your employees change and your challenges change. Professionally, I have recently become a sole practitioner for example. Someone once said, When you are through changing, you are through. We all must learn how to continue managing change in our lives.

3. What is a mark? Something that identifies and distinguishes goods or services from one source from those manufactured and sold by others. Unlike patents which expire 20 years after filing or copyrights which enter the public domain after the life of the author plus 95 years service marks and trademarks can last forever when properly used, registered and policed!

4. Are they valuable? The Coca-Cola Company values its “Coca- Cola” brand at over $67 billion dollars for purposes of accounting.[1] [1][1] Source: Intellectual Asset Management August/September 2005 page 5 & Interbrand/Business Week.

5. How are rights created? Common law rights in marks are created through proper use of the mark in commerce regulated by the U.S. Congress under the commerce clause of the Constitution. First in time is first in right when it comes to brands. They are also created tentatively upon filing of an intent to use application at the U.S. Patent and Trademark Office.

6. What can be a brand? Almost anything that can indicate the source, origin or sponsorship of your service or product. A Word (Nike) A Logo A Design A Slogan (Just Do It) A Smell (Plumeria yarns) A Non Functional Package (Trade Dress) A Building (the Pizza Hut) A Personal Name (with permission) A Sound (MGM Lion’s roar; NBC chimes) A Color (pink for fiberglass insulation)

7. Service Mark: Any word, name, symbol, design or combination thereof used by a person or entity to distinguish or identify services of one party to those of others in commerce. Advertising is the way one uses a service mark. 15 USC Sec. 1127 notes that the term "service mark" means any word, name, symbol, or device, or any combination thereof - (1) used by a person, or (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown.

8. Trademark Any word, phase, symbol, design or combination thereof used by a person or entity to distinguish or identify goods of one party to those of others with the intent to use the mark in commerce. This type of mark appears on the product or its packaging or in a display closely associated with the sale of the goods most of the time.

9. Spectrum of Distinctiveness for enforcement and registration Fanciful/Coined(strongest) Arbitrary Suggestive Descriptive Generic(weakest)

10. Inherently Distinctive Marks Fanciful or Coined Marks - a term with no independent meaning: rather, coined for the sole purpose of functioning as a trademark. “Google” for internet searching. An arbitrary mark, such as “Baby Ruth ” for candy bars, uses ordinary words but in an arbitrary or fanciful way. Such a mark is registrable and is usually accorded a fairly broad scope of protection.

11. Inherently Distinctive Marks-A Suggestive Marks - a term that suggests some quality, feature or characteristic of the goods, but requires imagination or thought to reach a conclusion as to the nature of the goods.

12. Non-Inherently Distinctive Descriptive Marks - marks which immediately describe a purpose, function, characteristic or feature of the goods. The mark “Chap-Stick” was merely descriptive of a quality or characteristic of the product—it is a “stick” for chapped lips. A descriptive term is usually accorded a narrow scope of exclusivity and is therefore often deemed initially to be a weak mark. Long and exclusive use affords such marks what is known as “acquired distinctiveness.” If a descriptive mark, either when adopted or through use, is distinctive of the goods or services it designates, it may be registered. GENERAL ELECTRIC has become a famous mark through acquired distinctiveness.

13. Generic Words The name of the product or service itself…as in a noun. “CAR” for an automobile. This word cannot, by definition, function as a mark under any circumstances. It can never indicate source, origin or sponsorship. CUSTOM-BLENDED gasoline, HONEY BROWN for ale, “french fries” and “danish pastries” (geographical terms) are all generic for a class of goods.

14. Use Your exclusive right to use your mark depends mainly on two things: How the service mark is used in your advertising; How the general public uses your service mark.

15. 4 Use Rules 1.Use proper notice ® only when mark is federally registered. 2.Use generic name of service after the mark. 3.Present your mark so that it Stands Out. 4.Use your mark as an adjective (a word that asks, which, how many or what kind of) and never as a noun.

16. Notice The symbol ® should be used with your mark. For example, The phrase “Registered in the U.S. Patent and Trademark Office” or the abbreviation “Reg. U.S. Pat and Tm. Off.” in small type in conjunction with the service mark. 15 USC Sec. 1111.

17. Use generic name after mark

18. Mark should Stand Out

19. Which of the following service marks stand out in your mind? Example 1 Example 2

20. Mark is an adjective Correct: Always used AARP ® investment services. Incorrect: Please use AARP ’s investment services. Never use mark in plural or possessive form.

21. Registration advantages National constructive notice. Immediate District Court Jurisdiction. 15 USC Sec. 1121. Shield against federal registration of confusingly similar marks by others. Insulates owner from subsequently filed state anti-dilution actions.

22. Use Based Application §1(a) Common law rights must exist. Dates of first use of the mark must be given. Specimen of the mark as used in commerce must be filed (label for trademark; brochure or advertising for service mark).

23. Intent-to-Use Application Bona fide intent to use the mark in commerce creates “constructive date of first use” as of filing of application. Subsequent filing of Statement of Use that includes dates of first use and specimen of the mark as used. When the Statement of Use is accepted and the application matures into a registration, it is enforceable from the filing date and not the first use date.

24. It is important to recognize that the key to service mark and trademark rights is acutal use in trade. The exclusive right to a service mark belongs to one who first uses it in connection with a specified service. Such use need not have gained wide public recognition, and even a single use in trade may sustain service mark rights if followed by continuous commercial utilization. Secret, undisclosed use on internal documents are generally inadequate to support the denomination 'use‘ use of your mark no matter how much money and time you have spent on the mark. Use

25. Non-use (without good justification) for three consecutive years can lead to abandonment of your mark. 15 USC Sec. 1127 says that a mark shall be deemed to be "abandoned" if either of the following occurs: (1) When its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandonment. "Use" of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark. (2) When any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark. Purchaser motivation shall not be a test for determining abandonment under this paragraph.

26. Common Law: Limited rights on services or goods as they are applied to the location where the mark is are used. Under state unfair competition law and federal unfair competition law one may protect one’s rights only in a given area where one has “valid” prior use of a mark.

27. Not all use is valid use, (i.e., ethical pharmaceutical drugs require FDA approval and prescription; sales of machine that use radiation such as X-ray equipment requires issuance of a prior government permit; food products must be properly labeled as to their ingredients, etc. Priority of legal or constructive use is required for a valid and enforceable federal registration. Use

28. Federally registered marks may become unenforceable and generic if they becomes the genus of the goods. ASPIRIN, INTERNET, YO YO, ESCALATOR, & MONOPOLY are some examples of federally registered marks which became generic. Misuse by others if unchecked, or misuse by the owner will often lead to a permanent loss of service mark or trademark rights. Federal Registration

29. State Registrations Rely on state registrations only when your service mark can not be federally registered for some reason. Understand that a federal registration will trump a state registration when the owner of the federal registration decides to expand into the particular state so proceeding with a service mark may create good will a prior federal registrant may be able to take away in the future. Life is good but not always fair.

30. Policing Your Mark Routine policing by the owner is required to discharge its duty to prevent consumer confusion. The amount of policing depends on industry standards and common sense. A written policy on internal and external use of your mark is good first step. See attachment to my paper for example. Employees and customers should help you to police your marks.

31. What to look for? Any mark that looks, sounds or has the same meaning as one of your service marks within your industry. Any actual marketplace confusion detected by your customers or employees. Any mark that creates a likelihood of confusion.

32. Infringement Infringement arises when a new entry to the market uses a service mark or trademark that is so close to your existing service mark that consumers are likely to be confused as to the source, origin or sponsorship of the new branded services or goods. Actual confusion occurs when your customer thinks you are related with some unrelated entity (it need not be a direct competitor) who is using a confusingly similar mark. If the two marks look alike, sound alike or have the same meaning and, if the services and/or goods are competitive or complementary then a likelihood of confusion may arise.

33. Infringement 15 USC Sec. 1114 says in part: (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; shall be liable in a civil action by the registrant for the remedies hereinafter provided.

34. Infringement Example: “JOSE GASPAR GOLD” for tequila was held to be confusingly similar to the registered mark “GASPAR’S ALE” last year. Similar channels of trade and “GASPAR” held to be the memorable part of each mark therefore confusion was likely. Registration denied. Owner of tequila mark wisely adopted another brand to avoid an injunction and damages.

35. Dilution Two types Federal Dilution under Section 43(c) of the Trademark Act. State Anti-Dilution Statutes in about 30 different states.

36. Dilution (continued) Federal Trademark Dilution Act was enacted in 1996 to provide a remedy for the dilution of “famous” marks only. Federal “dilution” means the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of: (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception. In 2003 the Supreme Court said that evidence of “actual dilution” was required to be shown under this statute. Moseley v. V Secret Catalogue, 537 U.S. 418 (2003)

37. Dilution (continued) State Anti-Dilution statutes are generally broader and looser that the federal law. For example, the New York law reads: “Likelihood of injury to business reputation or of dilution of the distinctive quality of the mark or trade name shall be a ground for injunctive relief in cases of infringement of a mark registered or not registered or in cases of unfair competition, notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services.”

38. Differences Under federal law only a “famous” mark is protected from subsequently use marks that actually dilute the distinctiveness of the mark but under state law “fame” is not a factor. Additionally, under state law evidence of actual dilution is not required.

39. Trademark Searches & Opinions To avoid marketplace confusion and to detect other similar brands for the same or similar goods or services before proceeding it is advisable to conduct a full availability search. It will allow your company to make an informed decision on whether or not to adopt, use and register a new service mark in light of the risks that are objectively identify by the contents of the search report. Various commercial entities provide very reliable full search report for relatively modest costs. By conducting a search and obtaining a written opinion you evidence your effort to act commercially responsibly in adopting a new service mark. The act removed future claims of recklessness and/or willfulness in the selection of a new mark should someone allege infringement.

40. Questions There are no dumb questions. Answers are another thing. Please understand that each case must be interpreted on its own unique facts and the goal has to be arrived at based thereon. Thank you for your attention. My new contact information: Bebanner@comcast.net © Brian E. Banner, 11/15/2005