This blog is the sixth in a series that Finkel Law Group is publishing to provide our readers with a broad overview of trademark law in the United States. In the United States, to maintain your legal rights in your trademarks, you must be diligent in protecting your marks by taking appropriate enforcement action against infringement and other misuse by third parties. One of the most significant enforcement mechanisms available to trademark owners is infringement litigation typically in federal court. In this blog post, we’ll explore the key aspects of trademark infringement lawsuits, the legal framework governing them, and what businesses should consider when pursuing litigation to protect their brand. Before you decide to take action to enforce your company’s trademarks you should consult an experienced trademark litigation attorney to discuss the most appropriate steps forward to protect your marks.
The Lanham Act
The Lanham Act provides causes of action for infringement of federally registered trademarks, under section 32, and infringement of marks not federally registered, under section 43(a). In infringement litigation, owners of federally registered marks typically assert false designation of origin claims against unregistered marks under section 43(a)(unfair competition), and infringement claims of registered marks under section 32. Depending on the ground for cancellation, a section 43(a) claim may survive a cancellation of the owner’s registration in the litigation because the claim does not depend on the existence of the registration. Federal and state courts have concurrent subject matter jurisdiction over Lanham Act claims. Most lawsuits, however, are brought in federal court because federal judges have greater knowledge and familiarity with the details of the Lanham Act and the case law interpreting it.
Section 43(a) of the Lanham Act is divided into two prongs, each with a different purpose and approach to granting relief for unfair competition. The first prong is section 43(a)(1)(A), which seeks to prevent deceptive conduct that causes consumer confusion. This is often referred to as the infringement prong. This section provides the statutory basis for claims of infringement against unregistered trademarks, claims of false designation of origin, and claims of false endorsement. The second prong is section 43(a)(1)(B), which seeks to prevent deceptive commercial advertising. This is the false advertising prong. It provides the statutory basis for all false advertising claims. When asserting a Section 43(a) claim, a plaintiff typically also asserts a trademark infringement claim under section 32(1) where it owns the registered trademark that is allegedly being infringed.
Section 45 of the Lanham Act says the statute is intended to protect persons engaged in interstate commerce against unfair competition. The courts have construed sections 43(a) and 45 together to limit protection to persons engaged in interstate commerce whose competitive or commercial interests have been harmed by a defendant’s conduct. This means individual consumers do not have standing to assert a claim under the infringement prong in section 43(a)(1)(A), even though a principal aim of the Lanham Act is to prevent consumer confusion. Weird? Yes, but individual consumers can still bring a claim under state consumer protection statutes or file a claim with the Federal Trade Commission.
To prevail on an infringement claim under section 43(a)(1)(A), the plaintiff must show it has (1) an interest in a valid trademark or trade dress, (2) has used the mark in commerce before the defendant commenced use of its mark, and (3) the defendant’s use of the mark is likely to cause confusion among consumers. The second and third elements are essentially the same for infringement claims under both section 43(a)(unregistered marks) and section 32(1)(registered marks). Section 43(a) also protects against infringement of protectable trade dress, such as distinctive product configuration, product packaging, or business décor.
Section 43(a)(1)(B) authorizes false advertising claims by a plaintiff who is commercially injured by a defendant’s false or misleading representations in commercial advertising. The challenged representation can be any statement, term, symbol or device that conveys a false or misleading message to consumers about the nature, qualities, characteristics, or geographic origin of any person’s goods or services. To prevail on a false advertising claim you must prove the advertisement made false or misleading: (1) statements of fact, like a false statement regarding test results for the plaintiff’s or the defendant’s product; (2) slogans, like a slogan that implies a defendant’s product has a function or quality that it does not have; (3) product names, like a name that falsely suggests a geographic origin; and (4) images or audio-visual images, like a television commercial misrepresenting a product’s failure to function. You must also prove (1) the statement deceived or had the capacity to deceive a substantial segment of potential consumers, (2) the deception is material because it is likely to influence a consumer’s purchasing decision, (3) the statement is made in interstate commerce, and (4) the statement has injured or is likely to injure the plaintiff. Although an express purpose of the Lanham Act is to protect consumers, individual consumers do not have standing to bring false advertising claims under Section 43(a)(1)(B) of the Act. Again, weird. As discussed in detail below, remedies for infringement and false advertising include injunctive and monetary relief.
Likelihood of Confusion
Likelihood of confusion is the test for trademark infringement. The term refers to confusion in the marketplace over source, sponsorship, or affiliation resulting from the simultaneous use by different parties of identical or similar marks for their respective goods or services. Likelihood of confusion is analyzed according to a multi-factor test. The specific tests vary somewhat from federal circuit to federal circuit, but common factors the courts examine include the following: (1) strength of the plaintiff’s mark, (2) similarity between the parties’ marks, (3) relatedness of the parties’ goods or services, (4) similarity of the parties’ trade and marketing channels, (5) defendant’s intent, and (6) existence of actual confusion among consumers.
When assessing the likelihood of confusion, courts consider each of the particular likelihood of confusion factors that are relevant to the specific case. Whether a particular factor is relevant in any given case depends on the facts of that case. The court’s analysis is not a mechanical process where the party with the most favorable factors wins. The factors instead serve as a guide to help the court determine whether consumer confusion is likely. The factors are not exhaustive. A court is free to consider any other factors that are relevant to its decision as to whether a mark is likely to create confusion among consumers. Most courts hold that no one factor is determinative of finding likelihood of confusion. The U.S. Court of Appeal for the Ninth Circuit, which covers California, places great emphasis on the similarity of marks where the goods or services of the parties to the lawsuit compete against one another in the market.
Additional Lanham Act and State Law Claims
Trademark owners may also protect their marks through other types of claims under the Lanham Act. Dilution is the lessening of the capacity of a famous mark to identify and distinguish goods or services. Dilution may occur by blurring and tarnishment. The Act provides a cause of action for trademark owners against cyberpirates who engage in bad faith registration or trafficking in domain names for profit. Trademark counterfeiting is a form of infringement involving the use of a counterfeit of a registered mark. The Act provides a trademark owner with additional potential remedies for acts of trademark counterfeiting.
Subject to various requirements, trademark owners may also protect their interests in their marks through claims under state statutes and common law. These can include claims for (1) common law trademark infringement and unfair competition, (2) unfair competition under state statutes, for example, deceptive trademark practices acts; (3) dilution under state statutes and common law, and (4) counterfeiting under state statutes. For federally protected marks, state claims are typically asserted together with federal claims under the Lanham Act in federal court.
Recording Trademarks with U.S. Customs and Border Protection
To help combat counterfeiting and gray market activities, trademark owners may record their trademark registrations with U.S. Customs and Border Protection so it can intervene when counterfeiters try to import counterfeit goods into the U.S. via the many ports of entry.
Looking Ahead
In the next installment of our trademark law series, we will explore the principal remedies available in trademark infringement cases, including injunctive relief and monetary damages, as well as the key defenses that alleged infringers may use to challenge claims against them. Understanding these remedies and defenses is essential for both trademark owners and those accused of infringement.
About Finkel Law Group
Finkel Law Group P.C., with offices in San Francisco and Oakland, has more than 25 years of experience helping our clients navigate the requirements for registering their trademarks through the U.S. Trademark Office, licensing those trademarks for commercial gain, and enforcing trademark rights in administrative proceedings before the TTAB and in judicial proceedings in federal court. When you need intelligent, insightful, conscientious and cost-effective legal counsel to assist you in understanding new laws that may affect your company’s intellectual property rights, please contact us at (415) 252-9600, (510) 344-6601, or info@finkellawgroup.com to speak with one of our attorneys about your matter.