Intellectual Property Law

Chapter 6 Lecture Notes

Major points to be addressed in the chapter materials include the following:

1. Inter partes proceedings are those involving disputes between parties regarding rights,
use, and ownership of trademarks. Inter partes actions are heard before the TTAB, a
department within the USPTO. The Federal Rules of Civil Procedure govern these
proceedings, making them highly similar to actions brought in federal courts
(although the entire matter before the TTAB is done by written document—there is
no “in person” trial as there is in a federal district court action).

2. An opposition is a proceeding initiated by a person who believes he/she may be
injured by registration of a mark on the Principal Register. Marks sought to be
registered on the Supplemental Register are objected to by way of cancellation
proceedings, not oppositions.

3. Oppositions are triggered by publication of a mark in the OG. An opposition must be
filed within 30 days after publication (or within an extended time period).

4. Extensions of time to oppose may be granted, as follows:

• A first request for 30 days will be granted without a showing of good cause.
Alternatively, a first request of 90 days will be granted upon a showing of good
cause.
• If the first request was for 30 days, a second request for 60 days extension will be
granted upon a showing of good cause.
• After receiving extensions for 90 days, a final request for 60 days will be granted
with the consent of the applicant or upon a showing of extraordinary circumstances.
• In no event may the time for filing an opposition be extended beyond 180 days
from the filing of the notice of publication.

5. If the parties cannot resolve their dispute, a Notice of Opposition is filed with the
TTAB (and it may be filed electronically), setting forth a short and plain statement
why the opposer believes he/she will be damaged by registration of the mark. The
Notice of Opposition is similar to a complaint in a civil action and the trademark
applicant will be required to file an answer to it, much the same way civil litigants file
answers to complaints.

6. Although opposers may allege various grounds in their Notice of Opposition, the
most common ground for opposing a mark is that it is confusingly similar to the
opposer’s mark.

7. Opposition proceedings are somewhat like trials. Discovery is held after the Notice of
Opposition and the applicant’s response to it are filed. The entire proceeding,
however, is done by the filing of documents with the USPTO. No oral presentation of
evidence occurs. TTAB proceedings and documents may be viewed using the
USPTO’s system TTABVue.

8. Like civil litigation, most oppositions conclude by voluntary settlement. The parties
often enter into a Consent to Use Agreement. The USPTO generally great weight to
these agreements, believing the parties are in the best position to determine if their
marks are confusingly similar to each other. Nevertheless, the USPTO will not allow
confusion of consumers, even if parties agree to such. Upon conclusion of the
opposition, the applicant’s file wrapper is returned to the USPTO and a registration
will issue (or a Notice of Allowance will issue if the application is based on intent-touse
the mark).

9. Because the window of opportunity for initiating an opposition is so narrow (some
action must be taken within 30 days of publication of the mark in the OG), the
Lanham Act affords another opportunity for challenging a mark. Thus, cancellation
proceedings are those initiated after a mark is registered.

10. The significant difference between oppositions and cancellations lies in their timing:
Oppositions are initiated before registration while cancellations are initiated after
registration.

11. If the mark is registered on the Supplemental Register, a cancellation can be initiated
at any time. If the mark is registered on the Principal Register, the petition to cancel
must be filed within five years of the registration date if the grounds are those that
would have justified denial of registration to begin with (descriptiveness, confusing
similarity, etc.). After five years, the Lanham Act narrows the grounds for
cancellation (to grounds such as that the mark has become generic, that the
registration was obtained through fraud, etc.).

12. The petition to cancel sets forth a short and plain statement for the petitioner’s belief
that he/she will be damaged by continued registration of the mark. The most common
grounds asserted in a petition to cancel are that the mark is merely descriptive, it is
confusingly similar to the petitioner’s mark, or that it has become abandoned.

13. Cancellation proceedings are nearly identical to those involving oppositions. Most
cancellations are settled voluntarily.

14. If two pending applications conflict or if a pending application conflicts with an
existing registration, the USPTO itself can declare an interference. Interferences are
rare proceedings and typically are declared only when the parties have no other
method for resolving their differences.

15. Concurrent use proceedings are used when parties use their marks in different
geographic areas (or perhaps for different goods or services). The parties basically
carve up the United States into different territories and each agrees to use the mark in
his/her territory. These proceedings are rare.

16. Parties who are dissatisfied with the results of the TTAB in an inter partes proceeding
may appeal to the Court of Appeals for the Federal Circuit in Washington, D.C.
Thereafter, an appeal may be taken to the U.S. Supreme Court if the Court, in its
discretion, grants certiorari for the case. As an alternative to appealing to the Federal
Circuit, the dissatisfied party may institute a civil action in the federal district court,
which will determine the issues de novo.

17. The owner of a federally registered trademark may bring a civil action in federal court
against a party who uses a mark that is likely to cause confusion with the registrant’s
mark. The action is for trademark infringement. The central inquiry is whether there
is a likelihood that an appreciable number of ordinarily prudent purchasers are likely
to be misled or confused about the source, affiliation, or sponsorship of goods or
services.

18. Although the circuit courts of appeal use varying tests and criteria in determining
whether marks are likely to be confused, the standard used in determining whether
there is a likelihood of confusion is the same as that used in the application process
when an examining attorney refuses registration of a mark on the basis that it is likely
to be confused with another prior mark, namely:

• Similarity of the marks in appearance, sound, connotation, and commercial
impression (the more similar marks are, the more likely confusion will occur;
marks are compared in their entireties rather than being dissected)
• Similarity of the goods/services offered under the marks (the more similar the
goods or services that are offered under the marks, the less similar the marks need
be for confusion to be found, and vice versa; goods/services need not be
identical—confusion can be found if they are related in some way)
• Similarity in the channels of trade in which the goods/services are offered (if
products are marketed to the same consumers and advertised in the same way,
confusion may occur)
• Conditions under which sales are made, namely whether purchases are made on
impulse or after careful consideration by sophisticated purchasers (if goods are
expensive, consumers will exercise care in buying and confusion is less likely
than when goods are inexpensive impulse items that consumers grab without
careful examination)
• Strength of the prior mark (strong, unique, and memorable marks like MUCKY
DUCK are given greater protection than weak, descriptive marks)
• Actual confusion (actual confusion is not required to support a case for trademark
infringement but if there has been significant actual confusion, the plaintiff is
likely to prevail). Confusion is generally shown through consumer testimony and
survey evidence.
• The number and nature of similar marks on similar goods (if many similar marks
exist for similar products, consumers become adept at distinguishing differences
among marks and confusion is less likely)
• Length of time during which there has been concurrent use with no confusion (if
the marks have coexisted for a long time and no confusion has resulted, this is
evidence that confusion is unlikely)
• Intent of infringer (if a party adopts a confusingly similar mark with the intent of
reaping the prior owner’s goodwill, this weighs in favor of confusing similarity;
thus, conducting a comprehensive search and relying on advice of counsel tends
to rebut evidence of an intent to cause confusion)

No one factor is determinative, and other factors that might be relevant to a likelihood
of confusion may also be considered.

19. A variety of defenses may be asserted by a defendant in an infringement action:

• Plaintiff has abandoned its mark
• Plaintiff’s mark has become generic
• Plaintiff’s mark is merely descriptive and is undeserving of protection
• Plaintiff’s registration was procured by fraud and is thus invalid
• Plaintiff is estopped or precluded from asserting infringement because it led the
defendant to believe it could use the mark
• Plaintiff has acquiesced to use of the mark by conduct that amounted to an
assurance that the defendant could use the mark
• Plaintiff has unclean hands and its bad conduct should bar any relief
• Laches (an unreasonable delay causing prejudice to the defendant) bars the action
• Defendant’s use is protected under the First Amendment as a parody or as free
speech
• Defendant’s use is fair use in that the word/name is not being used as a trademark
but is merely being used by the defendant to describe its goods in a general
fashion

20. There are a variety of remedies for infringement:

• Injunctive relief preventing the defendant from further use of the mark
• Monetary damages to compensate the plaintiff for the injury it has suffered
(which may be trebled)
• Seizure or destruction of the offending goods
• Costs of the action, including attorneys’ fees (in exceptional cases)

21. Generally, a party who believes its mark has been infringed sends a cease and desist
letter to the other party, demanding the infringer cease any further use of the
offending mark. The letter puts the infringer on notice of the plaintiff’s rights and cuts
off any defense of innocent infringement.

22. A newer issue is “trademark bullying,” generally defined as the use of aggressive
tactics by a well-known trademark owner with significant assets to enforce its
trademark rights. In many instances, this practice “backfires,” with social media being
quick to condemn the “bully.” Thus, trademark owners must walk a fine line: They
must protect their valuable marks, but they cannot be perceived as being overly
litigious, or they may well lose the public relations war.

23. If the dispute cannot be resolved amicably, the plaintiff will file an infringement
action in federal district court. There is no statute of limitations for actions brought
under the Lanham Act for trademark infringement, and typically, laches is the defense
raised to assert that an action is time-barred. Any claims the defendant has relating to
the trademark must be asserted in the same action. After the complaint and answer are
filed, discovery will commence. If there is no settlement, the matter will proceed to
trial. Either party may request a jury trial. The decision may be appealed to the U.S.
Court of Appeals for the circuit in which the district court is located. Thereafter, the
case may be appealed to the U.S. Supreme Court, if it grants certiorari.

24. As an alternative to filing an infringement action, one may initiate a Section 337
proceeding with the International Trade Commission, which can order infringing
goods excluded from the United States. Monetary damages cannot be awarded. ITC
proceedings are fairly quick and inexpensive.

25. The Federal Trademark Dilution Act was enacted in 1996 to protect famous marks
whose owners cannot establish the likelihood of confusion needed to prevail in an
infringement case (generally, because the goods offered under the marks are not
related).

26. There are two forms of dilution: blurring (the whittling away of the distinctive value
of a mark through its use on unrelated products, such as NIKE CANDLES) and
tarnishment (using the mark in an unsavory way, such as a poster reading “Enjoy
Cocaine” in the famous script used by Coca-Cola Co.).

27. The Federal Trademark Dilution Act lists several factors for courts to consider in
determining whether a mark is sufficiently famous that it is protectable under the Act,
including duration and extent of use of the mark; duration and extent of publicity of
the mark; degree of inherent or acquired distinctiveness of the mark; fame of the
mark; and whether the mark is federally registered.

28. New dilution cases alleging tarnishment often involve use of famous marks in
Internet domain names for sexually explicit sites.

29. After a U.S. Supreme Court case (Moseley v. V Secret Catalogue, Inc., 537 U.S. 418
(2003)) held that owners of famous marks must show actual dilution in order to
prevail on a dilution claim, Congress amended the FTDA in 2006 to clarify that
actual dilution is not necessary to prevail under the FTDA—a likelihood of dilution is
sufficient. Additionally, Congress clarified that a mark must be famous on a national
basis, not merely famous in a niche area.

30. In many instances, U.S. trademark owners grant rights to those in foreign countries to
manufacture goods that bear the U.S. trademark. After the goods are distributed in the
foreign markets, other parties often buy them and import them back into the United
States to resell, often in competition with the mark’s owner. These goods are called
gray market goods or parallel imports. Most courts hold that the import and sale of
genuine gray market goods is not infringement because once a mark owner sells goods
bearing its mark, it cannot prevent subsequent owners from reselling the goods (so long
as there is no deception or consumer confusion). The doctrine is referred to as the first
sale or exhaustion theory inasmuch as once the first lawful sale is made, the trademark
owner’s rights are exhausted as to later sales. Thus, a consumer is free to sell a Ford
TAURUS or SONY video camera to another without committing infringement.
However, if gray market goods are materially different from the authorized imports,
then it may create a likelihood of confusion and the imports may be banned.

31. Trademark counterfeiting is the use of a trademark owner’s mark with goods/services
that do not originate with the mark owner. To deter counterfeiters, many statutes
allow for the immediate impoundment and destruction of knock-off goods, awards of
treble damages, actual damages, attorneys’ fees, and criminal penalties. The PRO-IP
Act of 2008 increased both monetary and criminal penalties. A party who cannot
show actual damages caused by a counterfeiter may elect statutory damages.

32. In late 2010, the Anti-Counterfeiting Trade Agreement (ACTA) was finalized among
numerous countries to combat counterfeiting and piracy and support enforcement of
IP rights on a global basis. At the time of the writing of this text, ACTA had not yet
been ratified by the appropriate number of countries and thus had not yet entered into
force (although it was signed by the United States in 2011).

33. Section 43 of the Lanham Act affords broad protection and prohibits nearly all forms of
unfair competition. Moreover, a party need not have a registered trademark to invoke
its protections and to sue for trademark infringement. The standard for trademark
infringement is always likelihood of confusion, whether one has a registered mark or
not and whether one brings an action under Section 43 or Section 32.

34. Owners of trademarks registered on the Principal Register can record their certificates
of registration with the U.S. Customs and Border Protection to block importation of
offending goods.