Strong trademarks curb legal challenges, costs
Trademarks can become hugely valuable in the marketplace as a company brands its name and products. Once a company establishes a trademark, it must police that mark, sometimes in court.
Trademark infringement lawsuits typically arise when it appears that consumers might be confused by two similar marks. Trademarks, based on words that can be uncertain or nuanced, represent a fascinating and psychologically rich legal terrain.
“The most inherently distinctive marks are called arbitrary or fanciful,” said Ross Jones, partner with Merrill Arnone & Jones, LLP, based in Santa Rosa. “They are considered the strongest marks.”
The next strongest mark is suggestive, also distinctive. Descriptive marks are not inherently distinctive.
“Where a lot of fights come into play is trying to distinguish between something which is suggestive,” which courts consider inherently distinctive, and descriptive marks, said Jones, who practices business law. Courts have difficulty drawing a line between these categories; infringement lawsuits may result.
Different federal circuit courts often apply trademark law differently, he said. The Ninth Circuit, which had jurisdiction over the White Oak Winery case [see story p.1], applies the “imagination test,” Jones said. How much imagination does it take for you to look at a product or service and connect it to the company’s trademark?
For example, a suntan lotion named After Tan was deemed descriptive by the court, he said, while Coppertone was considered suggestive and, therefore, a stronger, distinctive mark.
White oak wood is used by cooperages to make barrels. But the Ninth Circuit judge who heard the White Oak Winery case saw the trademark as suggestive, having strong secondary meaning derived from long use.
“It’s more evocative,” Jones said. “You imagine white oak as a place or a state of mind or a feeling. That’s the argument I would make in favor of the mark being suggestive.”
The winery had also registered the trademark, another factor in its favor.
Descriptive marks can be registered by the U.S. Patent and Trademark Office if the applicant shows evidence of significant secondary meaning, perhaps by presenting consumer surveys or affidavits showing awareness of the link between a product and its source. Five continuous years of use of a mark can be considered evidence of secondary meaning by acquired distinctiveness. The trademark office has discretion.
Some companies submit evidence of marketing expenditures as proof that a trademark has secondary meaning, Jones said. Such evidence is unconvincing, as the money may not have created an association in consumers’ minds between a brand and a company. “What if your marketing was really ineffective?” Jones said.
“The test of trademark infringement is likelihood of confusion,” Jones said. Would a consumer, looking at competing marks, confuse one with another in terms of connecting the trademark to the source of the product or service?
Generic phrases and words used in their ordinary meaning can never be registered as trademarks, Jones said. Coffee cup, for example, could not be registered for a product that would hold liquids, no matter how much money a company has spent on marketing.
“The trademark office and a court are never going to accept that I have exclusive use” of coffee cup, he said.
However, if Coffee Cup Computers were used as a trademark, that would be considered distinctive, just as Apple Computers was.
“If I try to trademark Apple for an apple, it’s never going to happen,” Jones said.
In trademark law, brands and names are not looked at in a vacuum, but as they specifically relate to goods and services in the marketplace. For there to be confusion, competing brands would have to be considered by a court to be used for the same or closely related products. Delta, the airline, competes sans confusion with Delta Dental and Delta plumbing fixtures.
“All three of those are registered marks,” Jones said.
None is infringing because the goods and services don’t overlap.
“No consumer is going to go into the hardware store, pick up a faucet and say, ‘I wonder if I can get an airline ticket from them,’” he said.
After a trademark is registered, it must be published for opposition to provide a 30-day window when it can be challenged by other companies. Some companies subscribe to “trademark watch” services that look for possible confusion in registered marks, notifying subscribers to take action. The holder of a trademark is responsible for policing its use in the marketplace.
“Many companies that have limited budgets will choose not to subscribe to a trademark watch service,” Jones said.