Please join me for a webinar to be broadcast live by Thomson Reuters on February 12, 2013, entitled “Brand Protection: Ten Tips to Managing Trademark Rights Effectively.”  In this webinar, I will be joined by two of my colleagues, Christina N. Scelsi (Scelsi Entertainment and New Media Law, PL, Port Charlotte, FL) and Sharra Brockman (Verv, Pittsburgh, PA).

Our panel will address the following topics:

1. Picking a Good Brand Name
2. Pre-Application Clearance Searches
3. Benefits of Federal Registration
4. Use and Bona Fide Intent to Use
5. Corrections to a Federal Application/Registration
6. Coping with Initial Refusals
7. Continued Consistent Use
8. Abandonment
9. Proper Use of a Trademark
10. Policing for Infringement/Enforcement

I hope you can join us.  If you are interested in joining us, please register through Thomson Reuters’ official site: http://westlegaledcenter.com/program_guide/course_detail.jsf?courseId=100004202.   

In addition to the other concerns you may have about starting a new business, you will also be deciding how to brand your new products or services. Perhaps you’ve had a team of people working on identifying a good brand name – perhaps you’re working on it yourself. Either way, you want to make sure that no one else adopts the same (or substantially similar name) and competes with you. How do you do this?

Choosing a Name

From the perspective of telling the public what you do in as few words as possible, perhaps you’ve picked a very descriptive name – such as Women’s Clothing, Inc. (if you sell women’s clothing), on the theory that people will come to you for your products if they can see automatically what you sell. However, from the perspective of developing a unique brand name that your customers and competitors will come to associate with only your products or services, you really should create a name that does not describe or suggest what products/services you provide , or serve as a generic term for them. Good examples of strong marks are Kodak for photo paper or Google for Internet searching services.

In the trademark world, if you’ve made up the name completely from scratch, and there’s no descriptive quality to the name, you can develop a very strong brand which will allow customers to think of you automatically when seeing your mark. You are also more likely to be able to achieve federal trademark registration and to keep others from trying to trade on the good will you develop if they use a name that is confusingly similar to yours.

Protecting Your Mark

Protecting your valuable trademark requires a multi-pronged approach. Under current trademark law, you obtain trademark rights under “common law” the moment you begin using the mark in commerce in connection with certain goods or services. There are benefits to federally registering your trademark (such as the availability of treble damages for willful infringement of a registered mark, ability to obtain “incontestable” status after five years, etc.), so consider whether applying for registration makes sense for you.

There are also things you should do to police your mark: for instance, you should research what new products or services your competitors are delivering, and what new brand names they may use. You should periodically search both the Internet and any relevant trade periodicals that are important in your industry to ensure that no one else is using marks that are similar to yours for similar products or services. You should also periodically search the USPTO database to ensure that no competing applications are filed covering similar marks or goods/services. You can engage a commercial search service (such as Thompson Compumark or CT Corsearch among others) to watch for new applications for a fee.

A recent study by the Secretary of Commerce confirms that trademark owners are obligated to police their markets to ensure that infringement does not occur, but the report also suggests that any single enforcement tool may not be enough on its own. Similarly, recent cases suggest that you cannot delegate this burden entirely to a third party, but instead must rely on a variety of enforcement tools. Tiffany v. eBay, Civ. A. No. 08-3947, 600 F.3d 93 (2d Cir. April 1, 2010) (rejected on appeal by the U.S. Supreme Court (see also this explanation)). In that case, Tiffany tried to hold eBay liable for accepting listings of counterfeit products that appeared to be Tiffany knockoffs. This case has been read to require that eBay would be obligated to take down any listings that were demonstrably counterfeit and about which the rights holder complained. And, while it had every incentive to remove counterfeit products it learned about, it was not responsible for pro-actively policing new listings to ensure that no further knockoffs were listed. This, instead, is the burden of the trademark owner.

Where to Go for Further Information

The US Patent and Trademark Office has some good resources to get you started in determining what creation and enforcement options may be right for you. You can also contact a trademark attorney for advice. Several bar associations for trademark attorneys are the American Bar Association’s Intellectual Property Law Section, International Trademark Association, Intellectual Property Owner’s Association and the American Intellectual Property Law Association. Each of these organizations provides information relating to trademark law that may be of interest to you.

The short answer is: as soon as possible after you learn about potential infringement.

In the current economy, some trademark owners may be reluctant to incur litigation costs or to pursue enforcement actions against potential infringers, when they believe the cost of pursuit might outweigh the potential value of a license agreement or a settlement with the other party.

If trademark owners delay enforcing legitimate rights, however, they risk losing the ability to enforce their rights because of the delay. There are risks associated with a decision to not enforce the rights against a particular infringer, or to delay enforcement (generally). In other words, the trademark owner’s claims could be dismissed for failing to take corrective action promptly.

There are three basic doctrines that result in a loss of enforcement ability, if they are alleged successfully: acquiescence, laches and/or waiver. These three doctrines usually appear as affirmative defenses to an infringement lawsuit when trademark owners try to sue a specific infringer.

Acquiescence

Acquiescence occurs when a trademark owner exhibits some measure of agreement or implied consent to a potential infringer’s use of a substantially similar mark. See, e.g., Profitness Phys. Ther. Center v. Pro-Fit Orthopedic and Sports Phys. Ther. P.C., 314 F.3d 62, 67 (2d Cir. 2002) (“The elements of acquiescence are: (1) the senior user actively represented that it would not assert a right or a claim; (2) the delay between the active representation and assertion of the right or claim; and (3) the delay caused the defendant undue prejudice.”) (internal quotations omitted); Bunn-o-Matic Corp. v. Bunn Coffee Service, Inc., 88 F. Supp. 2d 914, 925 (C.D. Ill. 2000) (“To establish acquiescence, Bunn-NY must show that Bunn-IL by word or deed conveyed its implied consent to Bunn-NY’s use of the Bunn mark.”). This implied consent can come in the form of refusing or declining to file suit against a specific infringer or failing to otherwise object to an infringing use of the mark.

Laches 

Laches is defined as “neglect to assert a right or claim which, taken together with lapse of time and other circumstances causing prejudice to adverse party, operates as bar in court of equity.” Black’s Law Dictionary. In other words, the delay caused harm to the defendant, and thus bars the owner’s ability to sue the defendant for infringement.

In order to get a case dismissed successfully under a laches theory, a defendant is not required to prove any intent to consent to the defendant’s specific use. Bunn-o-Matic Corp. v. Bunn Coffee Service, Inc., 88 F. Supp. 2d 914, 925 (C.D. Ill. 2000) (“Laches does not require proof of intent. . . . To prove laches, Bunn-NY must show (1) an unreasonable lack of diligence by the party against whom the defense is asserted and (2) prejudice arising therefrom.”). Compared to acquiescence, where a defendant must show implied consent of a trademark owner, “laches implies a merely passive consent.” Profitness Phys. Ther. Center v. Pro-Fit Orthopedic and Sports Phys. Ther. P.C., 314 F.3d 62, 67 (2d Cir. 2002) (citations omitted).

Waiver 

Finally, a defendant can assert that a trademark owner waived its right to sue for infringement in this specific case. Wavier generally requires “the intentional relinquishment of a known right.” U.S. v. King Features Entm’t, 843 F.2d 394, 399 (9th Cir. 1988). However, waiver is harder to prove than either acquiescence or laches because “it involves not sleeping on one’s rights but intentionally relinquishing them.” RE/MAX Int’l, Inc. v. Trendsetter Realty, LLC, 655 F. Supp. 2d 679, 711 n.12 (S.D. Tex. 2009). It also requires supporting evidence that “so clearly” indicates an intent to relinquish a known right that any other reasonable explanation is simply excluded. Allstate Fin. Corp. v. Dundee Mills, Inc., 800 F.2d 1073, 1075 (11th Cir. 1986).

Conclusion

Failure to oppose a junior user’s similar trademark or simply failing to enforce one’s own trademark rights in a timely manner can result in an inability to pursue infringement remedies against others. It can result in consumer confusion about the source of goods or services provided in connection with the similar marks, and undermine the value of the trademark owner’s brand.

Because trademark owners necessarily have invested money and resources in developing their brands, and the consumer’s good will associated with those brands, it’s good practice to ensure that some enforcement mechanism is in place to protect these valuable assets. Trademark owners generally should avoid positioning themselves in any way that causes these defenses to become viable means to dismiss the lawsuit they’ve chosen to pursue.

(Note that there may be many reasons why enforcement of a trademark at a particular time should or should not be undertaken, each of which should be reviewed carefully with your attorney(s) in the context of the circumstances presented.)