Seattle Trademark Lawyer

This is the second part of excerpts from my materials, “Basics of Trademark Protection in Plain English.” It focuses on the “offensive” considerations a trademark owner should think about when selecting a trademark.

C.       “Offensive” Considerations

As a trademark owner, you normally want to select a trademark that is both registrable and enforceable against later adopters. Your ability to do these things is heavily influenced by the technical strength of the mark. To determine strength, courts place the mark on the spectrum of trademark distinctiveness most prominently discussed in Abercrombie & Fitch Co. v. Hunting World, 537 F.2d 4 (2d Cir. 1976). In doing so, they categorize each mark as “generic,” “descriptive,” “suggestive,” “arbitrary,” or “fanciful.” 

A mark is generic if it denotes the thing itself, or category of thing. Generic marks have no trademark significance because they are incapable of distinguishing one source from another. If a mark is generic – either from inception, or because it has become generic over time, like the once-proprietary brands “elevator,” “escalator,” “nylon,” and “raisin bran” – it is deemed to be always generic and can never be registered or enforced. 

Descriptive trademarks immediately convey information about the good or service being sold. In this way, SPEEDY AUTO GLASS is a descriptive trademark because it tells consumers that the company installs auto glass, and that it does so in a hurry. Descriptive trademarks can only be registered on the lesser Supplemental Register (which doesn’t offer all the benefits provided by the Principal Register), and cannot be enforced against third parties, unless the owner can establish that the mark has acquired distinctiveness, or “secondary meaning.” A mark acquires secondary meaning through longstanding use (usually at least five years) and proof of sales, advertising expenditures, or (most persuasively) consumer surveys. A descriptive mark with secondary meaning can be registered on the Principal Register and can be enforced against later-adopters (though third parties can still use descriptive terms to describe their own goods and services even if such terms happen to be your client’s trademark). These limitations make descriptive marks the weakest form of protectable trademark. Surnames and geographic names are classified as descriptive marks, as are self-laudatory “we are the best” words. For this reason, the very descriptive SEATTLE’S BEST COFFEE trademark is technically weak, though it has become commercially strong through its longstanding use, millions of dollars spent on advertising, and millions of cups of coffee sold.

Suggestive trademarks are one rung up the protectability ladder. They suggest a quality or characteristic of the good or service being sold, but require the consumer to exercise at least some degree of imagination to understand the information being conveyed. Take, for example, CHICKEN OF THE SEA. This mark tells consumers that the good sold under the mark is seafood, and it is akin to chicken. The consumer must process this information to understand that the good being hinted at is tuna fish. Marks with double entendres are likewise classified as suggestive. The distinction between descriptive and suggestive marks can be blurry, but it’s an important one, because suggestive marks do not need proof of secondary meaning. Suggestive marks, therefore, are inherently distinctive and are protectable upon adoption.

Arbitrary marks put a familiar word in an unfamiliar context, such as APPLE for computers. While APPLE as a brand name for fruit would be generic, it has no meaning when paired with computers. For this reason, arbitrary marks are considered inherently distinctive and, indeed, are given wide berth as a strong trademark.

Fanciful marks are perhaps the strongest class of mark. They are made-up words, like GOOGLE, EXXON, and POLAROID. They are accorded great protection because they usually leave the defendant with little explanation for adopting a confusingly similar mark. Given the infinite number of possible trademarks, a court can quickly conclude that a search engine named “GAGGLE” was only given that name to benefit from confused consumers. In this way, both arbitrary and fanciful trademarks are thought to “cast a long shadow,” which later trademark adopters need to avoid.

There also are a number of statutory bars to registration or enforcement that don’t stem from technical strength. Under federal law, they are largely set forth in Section 2 of the Lanham Act, 15 U.S.C. § 1052.  These include marks that are primarily surnames, marks that would tend to deceive consumers, marks that include someone’s name without their permission, and marks that include country flags.  Other statutes grant exclusive trademark rights to specified owners in the way that  OLYMPIC, OLYMPICS, and the five-ring logo may only be used by the U.S. Olympic Committee and its licensees (with a narrow carve-out for longtime users of the OLYMPIC and OLYMPIC names that are located near Washington’s Olympic Mountains). Obviously, one needs to avoid these marks if they want a brand they can register and protect in court. 

In summary, owners selecting a new trademark need to appreciate the ramifications of where the mark would likely be placed on the spectrum of distinctiveness, and avoid the statutory bars to registration and enforcement. Only then can they help maximize the scope of their trademark protection.

Hopefully, this discussion is helpful. The third and final installment — regarding “defensive” considerations in selecting a trademark — will come next.

I’m giving a talk to new lawyers about trademark protection — the nuts and bolts of things to consider to get the most out of a trademark. Following is the first part of an adaptation of the materials I prepared.

A.      Enforcement Principles

The main way to protect a trademark is by perfecting and maximizing one’s rights in the mark, which usually occurs by registering it with the U.S. Patent and Trademark Office, and then by enforcing those rights against competitors, imitators, and would-be users in an effort to keep them as far away as possible from the property. 

Enforcement, in turn, usually boils down to sending cease-and-desist letters to the wrongdoers in the hopes of obtaining voluntary compliance with your demands, under threat of suit; and if the wrongdoer doesn’t voluntarily comply, to carrying out the threat and commencing suit. In this respect, protection of one’s intellectual property rights is both binary and simple: either the wrongdoer voluntarily stops its bad behavior in response to your pressure, or it doesn’t; and, if needed, you either escalate the dispute to court, or you don’t. There really aren’t any other legal options.  (I don’t count hiring the likes of Tony Soprano (R.I.P) to enforce one’s rights as a legal – or advisable – option.) 

B.       Basic Principles of Trademark Law

Trademarks function the way cattle brands function on a ranch.  Cattle brands distinguish one cow from another, so there’s no question which cow belongs to which rancher, even if they get mixed together. Trademarks are the same way. They are unique names, symbols, or tag lines (among many other devices) that tell consumers that a good or service sold in connection with the brand comes from a particular producer. They are affixed to the product itself, or product packaging, or they are displayed on websites or other promotional materials. When consumers see a Nike shoe, for example, the Nike name, Swoosh logo, and “Just Do It” tag line tell consumers that the shoe doesn’t come from Adidas, New Balance, or any other manufacturer – it only comes from Nike. In this way, trademarks symbolize the owner’s reputation and encourage good, consistent, quality by enabling consumers to efficiently identify producers and make repeat purchases. In other words, if you like Nike shoes, you know where to go when you need to buy a pair (or who to avoid if you weren’t satisfied with your previous purchase).

Trademark law is a creature of both state and federal law (and both statutory and common law). At bottom, trademark rights arise through use, which means affixing the mark to a good or product packaging (for goods) or by displaying the mark on websites or signs (for services), and selling the item to consumers. Registration is available through state governments and the U.S.P.T.O. Registration is not required, but it expands the geographically limited rights that automatically arise through use. There is a lot to say about trademark registration, but further discussion is outside the scope of this discussion.

Protecting a brand normally starts with selecting a brand. Protection has two facets, which you can think of in terms of both sides of a coin. You probably want to register your mark (or at least have that option), and you want to be able to enforce it in court. But you also want to choose a brand that won’t get you sued by another trademark owner.  In other words, there are “offensive” considerations, and “defensive” considerations. To understand them, you need to know a few basic principles.

First, the maxim of “first in time, first in right” often controls. That means if you start using your mark first, you (usually) can go to court to prevent later adopters from using a brand that is close to yours in connection with similar goods or services. Registrations can change this outcome, but that discussion is outside the scope of this writing. Therefore, we will proceed with the simple notion that when there is a conflict between two trademark owners’ rights, the first user in a given geographic area will have superior rights – called priority – and will win in a trademark infringement lawsuit against a later adopter.

To do so, however, a trademark plaintiff also needs to prove that the later adopter’s trademark use is “likely to cause confusion” with the plaintiff’s prior trademark use. Whether a likelihood (probability) of consumer confusion exists is determined by the multi-factor test that applies in a given jurisdiction. In the Ninth Circuit, it is known as the “Sleekcraft” factors, after the influential trademark infringement case of AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979). But other jurisdictions have similar tests under different names.  Regardless of the jurisdiction, courts apply this test to determine whether an ordinary consumer would likely be confused into believing that the branded goods or services that come from the later adopter (the “junior” user) come from, are approved by, or having something to do with, the earlier adopter (the “senior” user). If the answer is yes, then a court would find the junior user liable for trademark infringement. 

The main factors in assessing a likelihood of confusion are the similarity in the parties’ marks (considering sight, sound, and meaning); similarity in the goods or services offered under the parties’ marks; the similarity in how the parties’ goods or services are advertised, marketed, and sold; and whether consumers have actually been confused in the marketplace. There are other factors, but these usually are the most important.

More to come in Part 2.

“A messenger just handed me some papers. It looks like I’ve just been sued for trademark infringement. What’s this mean?”

I get this question often enough that I thought I’d summarize my answer. Here are the highlights:

1. The plaintiff’s rights. If the plaintiff has a federal trademark registration, it is entitled to the presumption that it is the exclusive, nationwide, user of the mark in connection with the goods and/or services listed in its registration. The standard for trademark infringement is “likelihood of confusion,” which means that if ordinary consumers would think that goods or services associated with a later-adopted trademark come from, are approved by, or have something to do with the registrant, the earlier-adopter is entitled to have the later adopter back away from the confusingly similar mark. The standard is not “identicality,” so it does not matter if relatively trivial differences exist between the marks. And even if the plaintiff’s mark is not registered, it has common law rights that automatically arise through its use in customer sales/distribution. Unlike a federal registration, those rights are limited to the geographic areas in which the plaintiff makes sales or distributes product. However, its rights are perfectly valid as well.

2. The defendant’s defenses. That is not to say that all conflicting trademark use is infringing. A defendant can use descriptive words to accurately convey information about its goods or services regardless of the plaintiff’s trademark rights. This is a form of a fair use, and is readily recognized in the law. Another limitation is geographic remoteness, meaning that if an unregistered trademark is only used in Miami, for example, the trademark owner has no rights to assert against a competing trademark owner in Seattle. Indeed, this principle is good reason for trademark owners to obtain a federal registration. There are other ways for a defendant to push back, including that no likelihood of confusion exists because the parties’ marks are different; the goods/services sold with the marks are different; the target consumers are different; the parties advertise and sell through different marketing channels; and the parties have coexisted for a long period of time without consumers being actually confused. These are but a few of the possible defenses.

3. The merits may not matter. Having just touched on the merits of the parties’ positions, it is important to understand that, for practical purposes, the merits may not really matter. What instead may drive the result is which party has more money, or which is more motivated to see the case through to the end. If one side has the resources to devote to the lawsuit and the other does not, the side with the resources naturally will win. Regardless of the merits, the party with the resources and fortitude can win a war of attrition. In other words, it can spend the other side to death. It is sad but true, and is a reality that defendants with limited resources need to come to terms with as early in the dispute as possible. Doing so will enable them to devote their more limited resources strategically and help effect as favorable an outcome (often through settlement).

4. A lawsuit is a business problem. Besides being expensive, litigation can be disruptive. It takes an organization’s key decision makers away from serving customers, improving products, and making sales, and forces them to devote time and energy to the lawsuit. Trademark owners are often emotional about their marks and want to defend their rights (perceived or real) to the death. That’s often a mistake. Regardless of the size of the defendant’s business, there’s almost always a better way to spend time and money than in a lawsuit. Smart litigants view litigation as a business issue and deal with it accordingly. Emotional litigants do not make for rational litigants.

5. Neither damages nor attorney’s fees will drive the litigation. In trademark cases, the main remedy the plaintiff seeks is an injunction. In other words, the plaintiff’s main motive for filing suit is to get the defendant to stop using its confusingly similar trademark. Proving money damages can be difficult. And getting an award of attorney’s fees is rare. Therefore, effecting a name change usually is the plaintiff’s goal. Except for extreme cases, win, lose, or draw, both sides will pay their own way in the litigation. More often than not, no money in the lawsuit will change hands.

6. Most cases settle. The vast majority of lawsuits won’t go from start to finish. It’s just too expensive, and too risky, for most parties to see a lawsuit through to the end (which can be a year or more from the date the case is filed). What happens to those cases? Either one side gives up; one side wins before trial; or the parties agree to settle. It’s usually hard for one side to win before trial because the issues in a trademark case usually are too factually-intensive for a judge to declare a winner without the benefit of trial. That means most cases end in settlement. Settlement is voluntary, of course, and the terms of settlement depend on what the parties are able to negotiate. For a plaintiff to accept settlement, however, it usually needs to accomplish its goal of effecting a change in the defendant’s trademark. Sweeteners to help persuade a defendant to settle would include (obviously) dismissing the lawsuit; obtaining a release from liability; obtaining a phase-out period for stopping use of its trademark over time, rather than abruptly, as would happen through an injunction; and whatever other terms a defendant can negotiate based on the facts and circumstances of its particular case.

7. The defendant needs to answer. After being served, defendants generally have 21 days to file an answer in the lawsuit. Failure to do so risks having the court give the plaintiff a win by default. A default judgment not only means the plaintiff (usually) would get an injunction prohibiting the defendant from using its mark, but it also increases the risk the court would award the plaintiff damages and attorney’s fees. These hammers give the plaintiff extra bargaining power in settlement, which the defendant can (and should) avoid by participating in the lawsuit. Merely starting settlement talks does not stop the 21-day clock, so a defendant either needs to file a timely answer or get the plaintiff’s agreement not to move for default while the parties are discussing settlement. Even then, the court still could enter default on its own, though that usually does not happen without warning.

8. The defendant needs a lawyer. If the defendant is an LLC, corporation, or other corporate entity, it will need a lawyer to represent it in court. It’s not an option for the owners of such entities to represent their company pro se, or without a lawyer. While it’s never advisable for nonlawyers to represent themselves in court, it’s not even an option in most trademark infringement cases. Nor should defendants think they will get a free attorney appointed to represent them in court. Public defenders are reserved for criminal defendants who can’t afford a private lawyer. For these reasons, defendants need to find a lawyer on their own.

Trademark infringement lawsuits have many moving parts. Each case is driven by its own facts and circumstances. The issues described above are common, and hopefully this discussion is helpful to those who find themselves sued for trademark infringement. But, of course, it is no substitute for sound legal advice.

A trademark registration can be a valuable asset.

This was borne out for an East Coast-based client I recently represented. It had a federal registration for its business name in connection with its business’ core offerings. It obtained the registration from the U.S. Patent and Trademark Office years before they came to me with their trademark infringement problem, so good for them for maximizing their rights in their mark.

Their efforts paid off. After they applied to register their mark, a Washington company started offering the same services in connection with a substantially identical name. The Washington company wrongly believed that because my client was located on the East Coast, there was neither harm nor foul in copying my client’s brand. The Washington company didn’t listen to reason, and the case ended up in court.

Fortunately, the court didn’t waste any time granting judgment for my client. It found that because my client had obtained a federal registration, it was presumed to be the exclusive, nationwide user of the mark in connection with the services listed on the registration. It entered a permanent injunction against the Washington company, the scope of which the parties expanded in settlement. This wouldn’t have happened if my client hadn’t registered its mark. Again, good for them!

This case shows the benefits of federal registration. A trademark owner can expand its localized rights by registering its mark. Doing so yields national rights against later adopters of marks that are likely to cause consumer confusion with the registered mark. If you’re a Seattle business owner and don’t care if someone in San Francisco, New York, or Miami adopts a trademark that is identical or close to yours in connection with similar goods or services, there’s no need to get a registration. But if that situation would bother you, your ticket to stopping it is getting a federal registration.

This really is a story about trademarks.

The State of New Jersey recently fined a bunch of bars for selling name-brand drinks but delivering generic booze instead.

Patrons ordered top-shelf drinks — specifying Maker’s Mark bourbon, for example. The bars charged top-shelf prices, but didn’t give their customers what they paid for, pocketing inflated profits in the process.

This really is a case of fraud. (It’s not relevant to the point, but I can’t help but reveal that many of the bars were T.G.I Friday’s. It sounds like it was an institutional practice — the chain agreed to pay a $500k fine and adopt a “Guest Satisfaction Assurance Plan” that apparently is intended to make sure patrons actually get what they pay for. Why a corporate “Plan” is needed to ensure that bartenders pour what customers order remains a mystery.)

This is an outrage. However, it also illustrates how trademarks work. If I want my martini made with BRAND X vodka, that’s what I tell my server. I expect to pay more than if I ordered a martini without specifying the liquor. But I most definitely also expect to have my order faithfully fulfilled.

Trademark infringement occurs when a later user selects a trademark that is likely to cause confusion with an earlier adopter in connection with similar goods or services. The consumer thinks he or she is buying from SOURCE A, but actually buys from SOURCE B. The consumer doesn’t get what he or she pays for, and SOURCE B gets a sale that was meant for SOURCE A. Nobody wins, except for SOURCE B.

What these bars are doing is even more insidious. They’re not tricking customers with an off-brand name that looks or sounds like a better-known, trusted brand. They’re pretending to deliver what was ordered and pass off one distiller’s liquor for another. The deceived consumer pays more and gets less.

It’s a breach of contract and breach of the public trust.

It also shows how vulnerable consumers can be when sellers fake trademarks.