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23.6: Trademarks

  • Page ID
    49183
  • A trademark is any word, name, logo, motto, device, sound, color, or graphic symbol used by a manufacturer or seller to distinguish its products. The main purpose of a trademark is to guarantee a product’s genuineness. In effect, the trademark is the commercial substitute for one’s signature. To receive federal protection, a trademark must be (1) distinctive rather than merely descriptive, (2) affixed to a product that is actually sold in the marketplace, and (3) registered with the USPTO.

    Symbol Associated with Trademarks Meaning
    ® The mark is officially registered with the USPTO
    The mark is not registered with the USPTO & is used with goods
    SM The mark is not registered with the USPTO & is used with services

    The Lanham Act protects trademarks. Unlike copyrights and patents, trademarks can last forever and are not subject to the Constitution’s limited time restriction. Since the objective of trademark law is to prevent consumer confusion, the public good is best served by allowing companies to maintain their trademarks as long as consumers associate a trademark with a specific origin. The moment they no longer make that association, however, the trademark ceases to exist.

    When it comes to trademarks, distinctiveness is good. Therefore, an invented word is the easiest type of trademark. In 1997, Larry Page and Sergey Brin were brainstorming names for their new Internet search engine, and invented the word “Google,” which is a play on “googol” that means 1 followed by 100 zeroes. They felt the name reflected their goal to organize the staggering amount of information available on the Internet. Common words can also become trademarks as long as consumers identify them with a particular source. For example, Amazon is the name of the world’s longest river, but it is also the name of an online retailer. Since consumers now identify Amazon.com as an online retailer, the name can be trademarked.

    People’s names may also be trademarked as long as they have a business presence. Over time, if consumers begin to identify a person’s name with their business, then the name has acquired secondary meaning and can be trademarked. Thus, Sam Adams is a trademark for a beer, Ben & Jerry’s is a trademark for ice cream, and Ford is a trademark for motor vehicles.

    Figure 23.1 Photo of Samuel Adams Beer Bottle
    photo of Samuel Adams beer bottleFigure 23.2 Photo of Ben & Jerry’s Justice ReMix’d Ice Cream

    photograph of Ben & Jerry's Justice ReMix'd ice cream container

    In addition to names and logos, slogans may also be trademarked. For example, “Built Ford Tough” and the “Quicker Picker Upper” are both trademarked slogans. Trademarks can also apply to a combination of distinctive words, logos, and slogans. McDonald’s has a trademark for its name, a trademark for its “golden arches,” and a trademark for its slogan “i’m lovin’ it.” McDonald’s could also trademark the combination of how those three items are displayed together in its advertising materials.

    Trademarks are usually granted for a specific category of goods. The same name can sometimes be used for multiple categories of goods. The name Delta is a trademark for both an airline and a brand of faucets. Since there is little chance that consumers will confuse an airline with a faucet brand, trademark law allows these dual registrations.

    On the other hand, some brands are so strong that they may stop registration even for a completely different category of goods. McDonald’s is a good example of this. The McDonald’s trademark is one of the strongest in the world and is instantly recognizable. In 1988, hotel chain Quality Inns launched a new line of budget motels called “McSleep.” McDonald’s sued, claiming trademark infringement. McDonald’s claimed that consumers might be confused and believe that McDonald’s owned the hotel chain. A federal judge agreed and ordered Quality Inns to change the name of the chain, which it did, to Sleep Inns.

    Trademarks go beyond a company’s name or its logo. A color can be trademarked if it is strong enough to create consumer identification. Pink, for example, is trademarked when used for building insulation by Owens Corning. All other insulation manufacturers must use different colors. Sounds can be trademarked too, such as MGM Studios’ lion’s roar. Distinctive colors, materials, textures, and signage of a Starbucks or T.G.I. Friday’s are considered trade dress and cannot be copied. A unique bottle shape also can be trade dress. Trade dress is the overall appearance and image in the marketplace of a product or commercial enterprise, including any packaging, labeling, design and decor. Interestingly, courts have been reluctant to grant certain smells trademark protection, even though it can be argued that certain fragrances such as Old Spice or CK One are distinctive.

    Companies providing services may receive trademark protection called a service mark. Instagram, for example, is a service mark.

    A trademark can also be used to demonstrate certification meeting certain standards, such as the Good Housekeeping Seal of Approval. The International Organization for Standardization (ISO) and its various standards for quality management (ISO 9000) or environmental quality (ISO 14000). The Forest Stewardship Council (FSC) allows its logo to be used on paper products that come from sustainable forests, while certain foods can be labeled “Organic” or “Fair Trade” if they meet certain standards as established by governmental or nongovernmental organizations. Each of these marks is an example of a certification mark.

    Finally, a mark can represent membership in an organization, such as the National Football League, Girl Scouts of America, Chartered Financial Analyst, or Realtor. Each of these is known as a collective mark. The rules that apply to trademarks apply equally to service marks, collective marks, and certification marks.

    The Lanham Act excludes a few categories from trademark registration, mainly for public policy purposes. Obviously, trademarks will not be granted if they are similar or identical to a trademark already granted. When starting a new company, businesses need to make sure that their business name is not already trademarked by someone else. Trademarks also cannot contain the US flag, any government symbol (such as the White House or Capitol buildings), or anything immoral. Trademarks cannot be merely descriptive. Therefore, every restaurant is allowed to offer a “Kid’s Meal,” but only McDonald’s can offer a “Happy Meal.”

    A trademark is valid as long as consumers believe that the mark is associated with a specific producer or origin. If the mark refers to a class of goods instead, then the trademark no longer exists. This process is called genericide. Many words today once started as trademarks: furnace, aspirin, escalator, thermos, asphalt, zipper, lite beer, Q-tip, and yo-yo are all examples of trademarks that are now generic and have therefore lost legal protection. To prevent genericide from occurring, trademark owners must actively police their use. If trademarks become generic, the owners will lose control of the marks and the public (and competitors) will be free to use those words just as they use “aspirin” and “yo-yo” today.

    Trademark infringement occurs when someone uses someone else’s mark, either completely or to a substantial degree, when marketing goods or services without the permission of the mark’s owner. When Apple first released the iPhone, it found out that “iPhone” was already a registered trademark belonging to Cisco for a phone used for calling over the Internet. To avoid trademark infringement liability, Apple purchased the trademark from Cisco.

    The elements of trademark infringement are:

    • Distinctiveness (strength) of plaintiff’s mark;
    • Similarity of the two marks;
    • Similarity of goods or services associated with marks;
    • Similarity of the parties’ facilities/operations;
    • Similarity of the parties’ advertising;
    • Defendant’s intent; and
    • Proof of actual confusion.

    Even if a trademark owner does not believe a similar use of its mark would lead to any consumer confusion, it can protect its trademark through a concept called dilution. Trademark dilution occurs when a trademark’s strength or effectiveness is impaired by the use of the mark by an unrelated product, often blurring the trademark’s distinctive character or tarnishing it with an unsavory association. For example, when an adult novelty store in Kentucky opened as “Victor’s Secret,” Victoria’s Secret filed a dilution suit in response. Under dilution concepts, the trademark owner only needs to show a likelihood that its mark will be diluted or tarnished in some way.

    Companies or persons accused of trademark infringement can rely on several defenses:

    • Marks are sufficiently different;
    • Fair use;
    • Parody;
    • Comedy and satire; and
    • Consumer advocacy.

    The most obvious is arguing that no infringement has occurred because the two marks are sufficiently different enough that consumers will not be misled. For example, in 2002 Jeep sued General Motors for infringing on what Jeep called its trademark grill. GM’s Hummer division released the H2 that year, with a similar seven-bar grill. A district court held that there was no trademark infringement because the grills were too dissimilar to cause consumer confusion.

    Figure 23.3 Photos of Hummer H2 and Jeep Grills

    Photograph of Hummer H2 Grill Photo of Jeep Grill

    Another defense is fair use. The Lanham Act prohibits the use of someone else’s trademark when selling goods. However, when a company mentions a competitor’s product to draw a comparison, this is called comparative advertising and is fair use of the competitor’s trademark. Honda, therefore, is free to claim that the “Honda Accord is better than the Toyota Camry” in its advertising even though Toyota and Camry are both trademarks.

    The First Amendment also recognizes the use of parody, comedy, or satire as fair use. Comedy skits on television that make fun of, or use, company logos are an example of this fair use. The First Amendment is also a defense for websites run by consumer activists who seek to criticize or parody companies, such as “www.fordreallysucks.com” or “www.peopleofwalmart.com.”

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