Trademark Infringement Essay

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The basic function of a trademark is that it is a sign of origin: it indicates the source or the trade origin of the goods and services to which it is applied. In addition to this essential function, trademarks can also fulfill other roles. For example, a trademark can act as a guarantor of quality; it can also fulfill an advertising role. For example, trademarks can convey particular messages or have a prestige associated with them that influence consumers’ perceptions of the products bearing these marks. However, these additional functions are secondary to the trademark’s principal role, which is to indicate origin.

Trademark Infringement Laws

In many countries, laws governing the definition, protection, and rights attributable to trademark owners date back to the 19th century. For example, Britain’s first trademark legislation was provided by the Trademarks (Registration) Act of 1875. Many countries that subsequently introduced their own trademark legislation adopted similar guidelines, particularly the requirement that the trademark should be “distinctive” to fulfill its essential function.

The Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, which built upon the Paris Convention, defined a trademark as “Any sign, or combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark. Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colors as well as any combination of such signs, shall be eligible for registration as trademarks. Where signs are not inherently capable of distinguishing the relevant goods or services, Members may make registrability depend on distinctiveness acquired through use. Members may require, as a condition of registration, that signs be visually perceptible.”

Registration confers upon the owner exclusive rights to the trademark. Trademark infringement applies to registered trademarks and occurs when unauthorized use of another’s mark is likely to cause confusion or to deceive as to the source or origin of the goods in question, although the precise emphasis differs between countries. For example, in the United States, the 1962 amendment to the Lanham Act of 1946 made more liberal the definition of infringement by removing the requirement that confusion, mistake, or deception of consumers as to the source or origin of the goods was required and stated that only the likelihood of confusion of an appreciable number of persons was necessary for infringement. It is often specified that for infringement to occur, the mark must be used in a commercial context, with a view to gaining economic advantage, and not as a private matter. The owner of a registered trademark is entitled to seek redress before the courts if there are grounds for believing that the mark has been infringed. The right to seek redress is provided for in the statutes governing the rights of registered trademark owners: for example, the Trademarks Act, 1994, in Britain.

Although the laws governing infringement stretch back to the 19th century, actions for infringement continue to be instigated by many of the world’s most famous companies. For example, in the United States, Adidas versus Payless ShoeSource, which began in 2001 and ended in 2008; CISCO threatened to sue Apple for infringing its trademark iPhone in 2007. In Europe, actions for infringement have been launched involving Arsenal Football Club; Cadbury Schweppes; DaimlerChrysler AG; easyJet; Orange; and Waterford Wedgewood.

In many of these and similar cases, the action for infringement was brought by the plaintiff on the grounds that the goodwill associated with the trademark was being damaged. From a producers’ perspective, trademarks can generate other advantages, all of which can be undermined by infringement. For example, reputation conveyed by a trademark can assist entry into new markets where high search costs would otherwise represent a significant barrier to entry; trademarks provide an endogenous mechanism for producers to maintain and uphold quality; trademarks help to reduce price and cross-price elasticity effects, thereby allowing their owners to achieve monopoly profits; finally, to the extent that they induce inertia in consumer preferences, trademarks facilitate the maintenance of monopoly power.

Global Trademark Agreements

It is common practice that marks are registered for a particular class, or classes, of goods. At the international level, the European Community, the United States, and over 50 other countries adhere to the Nice Agreement Concerning the International Classification of Goods and Services for the Purpose of the Registration of Marks. This agreement of 1957 has been through a number of revisions, most notably the eighth edition, which came into force in 2002. The Nice Agreement provides for the registration of marks in a number of classes of goods and services. In the former category, for example, there are classifications for bleaching preparations and other substances for laundry use; pharmaceutical and veterinary preparations; vehicles and apparatus for locomotion by land, air, or water. In the latter category, the eighth edition of the Nice Agreement has classifications for scientific and technological services, including design and development of computer hardware; services for providing food, drink, and temporary accommodation; and services for the protection of property and individuals.

The regulations governing trademark registration try to ensure that potential conflict between existing marks and marks put forward for registration are minimized. For example, the TRIPS Agreement stipulated that marks may be denied registration if they are simply reproductions or imitations of existing marks that are likely to cause confusion. Trademarks may also be refused registration if they are likely to deceive the public as to the quality or geographical origin of the goods. It is the normal practice that trademarks proposed for registration are published to allow owners of existing marks to raise objections. Trademark legislation in many countries permits the registration of the same or similar marks when there has been “honest concurrent use” of the two marks. Nonetheless, in deciding upon registration of concurrent marks, the courts will consider the following issues: the degree of likelihood of confusion from the use of the two marks; the duration of concurrent use; the evidence of confusion; and the honesty of the choice and subsequent use of the mark.

Classes Of Infringement

Actions for infringement remain prevalent. Three broad classes of infringement exist. The first is the use of a mark that is identical to the registered trademark as applied to goods and services that are identical with those for which the mark is registered. A hypothetical example of this would be using an identical copy of the Coca-Cola trademark and applying it to a soft drink that was not manufactured by Coca-Cola. Second is the use of a mark that is similar to the registered trademark as applied to goods and services that are similar to those for which the mark is registered. A hypothetical example of this might occur when a mark that was identical in every respect to the Coca-Cola trademark—but colored blue instead of red—was applied to confectionary. Finally, use of a mark that is similar to the registered mark as applied to goods and services that may not be similar to those for which the mark is registered. A hypothetical example of this might occur when a mark that was similar to Coca-Cola’s trademark was applied to jet engines.

Within these three broad classes of infringement, a number of issues arise that are specific to the precise nature of the infringement, for example, the extent to which use of a trademark by a third party is likely to cause confusion. For instance, suppose a trader uses another’s trademark to sell merchandise. If the use of this mark by the trader is such that the impression is created that a material link exists in trade between the trader and the registered owner of the trademark, then the courts may decide that infringement has occurred. Much can depend on how the “average consumer” understands the way in which a particular trademark is used.

One illustration of this would be the case where a T-shirt had embossed on it a company’s registered trademark. In such a case, the issue is whether the typical consumer believes there is a link between the trademark owner and the T-shirt, or whether use of the mark on the T-shirt is simply descriptive and therefore not designed to convey trade origin. Other examples of this type of infringement include use of a registered trademark by a third party on imported or exported goods, and/or use of such mark by a third party on advertising literature or trade material. Other infringement issues can arise from employment relationships. For example, unless prevented by contract, an employee may leave a reputable firm and set up a similar business of his/her own and advertise the former connection. However, this advertisement must not lead consumers to believe that the connection is still ongoing. Similar problems can arise when a business partnership folds and one of the partners claims the trademark of the partnership and its associated goodwill for an independent venture.

Seeking Redress For Infringement

Actions for infringement are not the only means by which the owner of a registered trademark can seek redress: an action for passing-off can also be instigated. Whereas an action for infringement has statutory provision by trademark legislation, actions for passing-off are based on common law to prevent unfair trading in its widest sense. The grounds for bringing a passing-off action are wider than trademark infringement itself, and give protection to all the means by which the goods of a particular trader are identified. However, passing-off actions are generally more complex and costly to enact than actions for infringement.

This is because registration provides prima facie evidence of the right to exclusive use of a mark, whereas in passing-off actions, there is a need to establish that false misrepresentation has occurred. Additional requirements for passing-off actions may also involve proof that goodwill has been damaged and that the characteristics of a particular product—for example, its labeling, wrapping, and the promotional activities associated with it—are understood by the public to be specifically distinctive of the plaintiff ’s goods or services; this last requirement may require witnesses to give evidence.

The key feature of trademarks that distinguishes them from other forms of intellectual property, such as copyright and patent, is that in theory, they have an eternal life. One consequence of this is that there will be an ongoing problem of trademark infringement for two reasons. First, as new products emerge, there will always be a risk that marks proposed for registration will “sail close to the wind,” that is, they will be similar to registered marks. Second, as a matter of competition, traders have always been free to decide which marks they wish to use to distinguish their products from those of others. Nonetheless, it is for the courts, and the courts alone, to determine in each case whether infringement has occurred and the legal solutions to be adopted.

Bibliography:

  1. Brian E. Banner, Trademark Infringement Remedies (The ABA Section of Intellectual Property Law, Bureau of National Affairs, 2006);
  2. Daniel J. Howard, Roger A. Kerin, and Charles Gengler, “The Effects of Brand Name Similarity on Brand Source Confusion: Implications for Trademark Infringement,” Journal of Public Policy & Marketing (v.19/2, 2000);
  3. Madeline Johnson and Ursula Spilger, “Legal Considerations When Using Parodies in Advertising,” Journal of Advertising (v.29/4, 2000);
  4. Siegrun D. Kane, Kane on Trademark Law: A Practitioner’s Guide (Practising Law Institute, 2007);
  5. David Kitchin et al., eds., Kerly’s Law of Trademarks and Trade Names (Thomson; Sweet & Maxwell, 2005);
  6. Leonard T. Nuara, What Every Litigator Must Know About Intellectual Property (Practising Law Institute, 2003);
  7. Daniel Jonathan Slottje, Economic Damages in Intellectual Property: A Hands-on Guide to Litigation (Wiley, 2006);
  8. Peter K. Yu, Intellectual Property and Information Wealth: Issues and Practices in the Digital Age (Praeger Publishers, 2007);
  9. Judith Lynne Zaichkowsky, The Psychology behind Trademark Infringement and Counterfeiting (Lawrence Erlbaum Associates, 2006).

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