Enforcing a Service Mark or Trademark in the Federal Courts in New Jersey
Enforcement of federal trade and service marks under the Lanham Act, 15 U.S.C. sections 1116 generally involves a combination of injunctive relief to stop the defendant from continuing to use the infringing name, plus compensatory damages, treble damages which are allowed by the statute, accountings for profits, and an award of interest, costs and reasonable attorneys fees as permitted by 15 U.S.C. sections 1117.
Under the Lanham Act, preliminary restraints may be imposed "according to the principles of equity." 15 U.S.C. sections 1116(a).
Generally, to win a trademark claim, a plaintiff must establish that:
- The trademark or service mark is valid and legally protectable;
- The trademark or service mark is owned by the plaintiff; and
- The defendant's use of the mark is likely to create confusion concerning the origin of the goods or services. One World Botanicals Ltd. v. Gulf Coast Nutritionals, Inc., 987 F.Supp. 317, 331 (D.N.J.1997); Opticians Ass'n. of America v. Independent Opticians of America, 920 F.2nd 187, 192 (3rd Cir. 1990).
We will consider each of these requirements individually.
- PROVING THAT A TRADEMARK OR SERVICE MARK IS VALID AND LEGALLY PROTECTABLE
A registered mark is valid and legally protectable if it is a distinctive mark (i.e., arbitrary, fanciful or suggestive), or if it is descriptive or has acquired secondary meaning. One World Botanicals, supra., at 331. A word that is merely descriptive is generally not subject to protection without strong proof that it has acquired a specific, secondary meaning which is identified by the consuming public. A secondary meaning exists when a party through advertising or massive exposure has established its mark in the minds of consumers as an indication of origin from one particular source. F.S. Services, Inc. v. Custom Farm Services, Inc., 325 F.Supp. 153 (D.C. Ill. 1966), aff'd 471 F.2d 671 (7th Cir. 1972). The patent and trademark offices classification of a mark as distinctive is generally given great deference by the court. Securacomm Consulting, Inc. v. Securacomm, Inc., 984 F.Supp. 286, 297 (D.N.J. 1997). In that case, the court held that the service mark "Securacomm" when used for security consulting services fanciful and therefore a distinctive mark. The court held:
"Clearly the mark at issue here is neither generic nor descriptive. Its origins show that it is a fanciful coined work derived from borrowing part of the work security and part of the word communications to form the work 'Securacomm.'" Id. At 297.
If a proposed trademark or service mark is considered by the patent and trademark office to be merely descriptive, the patent and trademark office requires proof of a secondary meaning. The fact that the patent and trademark office does not require such proof is a factor that the courts will consider in finding that a mark is fanciful and distinctive, rather than merely descriptive.
- OWNERSHIP OF A MARK IS GOVERNED BY PRIORITY OF USE
Ownership of a trademark or service mark is governed by priority of use. Registering the mark with the patent and trademark office constitutes only prima facie evidence of ownership, and casts the burden on the defendant to prove that it used the mark before the plaintiff. However, if the defendant can prove prior use, then it has the right to continue to use the mark. See, Securacomm, supra. At 297-298.
An application to the patent and trademark office must include a statement as to the date of the first use of the mark in commerce. Thus, the filing establishes the first use by the plaintiff, although the plaintiff must be prepared to prove that it actually began use of the mark on the stated date.
When forming a new entity or embarking upon the marketing of a new product, it is important to register your trademark or service mark. Before registration, a search should be completed of all trademark and service mark filings with the United States Patent and Trademark Office, with all fifty (50) states of the United States, and a search must be done of all business names being utilized in all fifty (50) states (generally called a "common law search"). Surprisingly, these searches can be obtained relatively inexpensively (usually less than $1,000.00) and with relatively quick turnaround (one to three weeks). While the searches are not fool proof, they do constitute a reasonably efficient means of assuring yourself that you will have ownership of a service mark or trade name before you file and before you expend substantial monies to market that trademark or service mark.
- LIKELIHOOD OF CONFUSION MUST BE PROVEN TO BE ENTITLED TO RELIEF UNDER THE LANHAM ACT AND UNDER COMMON LAW UNFAIR COMPETITION CLAIMS
"Likelihood of confusion exists when consumers viewing the mark would probably assume that the product or service it represents is associated with the source of a different product or service identified by a similar mark." Scott Paper Co. v. Scott's Liquid Gold, Inc., 589 F.2d 1225, 1229 (3rd Cir. 1978). To prove a "likelihood of confusion," it is not necessary to prove actual confusion in the marketplace. It is enough to prove a "likelihood" that the unauthorized use will create confusion. Salton, Inc. v. Cornwall Corp., 477 F.Supp. 975, 989 (D.N.J. 1979). However, instances of actual confusion are particular persuasive and important evidence proving the fact of a likelihood of confusion.
In Scott Paper, the Third Circuit Court of Appeals set forth then (10) factors to be considered in determining whether a "likelihood of confusion" exists, as follows:(1) The degree of similarity between the owner's mark and the alleged infringing mark; (2) the strength of the owner's mark; (3) the price of the goods and other factors indicative of the care and attention expected of consumers when making the purchase; (4) the length of time the defendant has used the mark without evidence of actual confusion; (5) the intent of the defendant in adopting the mark; (6) the evidence of actual confusion; (7) whether the goods, though not competing, are marketed through the same channels of trade and advertised through the same media; (8) the extent to which the targets of the parties' sales efforts are the same; (9) the relationship of the goods and the minds of the public because of the similarity of function; (10) other factors suggesting that the plaintiff might manufacture a product in the defendant's market." Scott, supra at 1229; Securacomm, supra at 299.
The ten factors do not, however, have equal weight. The most important of the ten factors is the similarity of the marks. Thus, when an infringer uses the exact same trademark or service mark, "there is a great likelihood of confusion." U.S. Jaycees v. Philadelphia Jaycees, 639 F.2d 134, 142 (3rd Cir. 1981).
In the context of an application for injunctive relief, the Courts in the Third Circuit have uniformly recognized that trademark infringement creating a likelihood of confusion constitutes irreparable harm as a matter of law. Opticians Assn. Of America, supra at 196-197; Pappan Enterprises, Inc. v. Hardee's Food Systems, Inc., 143 F.3d 800, 805 (3rd Cir. 1998) ("This court has held that once the likelihood of confusion caused by trademark infringement has been established, the inescapable conclusion is that there is also irreparable injury"); One World Botanicals, Ltd., supra at 336 (". . . the Third Circuit has adopted the position that where the plaintiff makes a strong showing of confusion, irreparable injury follows as a matter of course."). Furthermore, where an infringing use creates the potential for damage to the trademark owner's reputation, the owner suffers irreparable harm. Opticians Assn. Of America, supra at 195-196; One World Botanicals, Ltd., supra at 336.
Other special rules in the context of enforcement of trade and service marks apply to requests for preliminary injunctions. Thus, in balancing the relative hardship of the parties, the courts have held that the mere fact that an injunction would cause expense to defendant, standing alone, is insufficient to avoid the entry of preliminary restraints. One World Botanicals, Ltd., supra at 337. When the infringement appears willful, the courts find that any hardship which is suffered by the defendant is entitled to less weight, because the defendant knowingly exposed himself or itself to liability. Opticians Assn. Of America, supra at 197. In Opticians Assn. Of America, the court explained the rule with respect to willfulness, as follows:
"One entering a field already occupied by another has a duty to select a trademark that will avoid confusion. . . Having adopted (a trademark which causes confusion, defendant cannot now complain that having to mend its ways will be too expensive.)"
Finally, the courts recognize that the public interest favors the avoidance of confusion in the marketplace, and therefore will favor the issuance of an injunction in the appropriate case. Bill Blass, Ltd. v. Saz Corp., 751 F.2d 152, 156 (3rd Cir. 1984); Opticians Assn. Of America, supra at 197 ("Public interest can be defined a number of ways, but in a trademark case, it is most often a synonym for the right of the public not to be deceived or confused.").
Trademark and service mark litigations are difficult cases that must be carefully prepared and which must, at the same time, be presented to the courts promptly in order to be entitled to critical injunctive relief pending final trial.