Trademark Priority

Intro to IP – Prof Merges

3.15.10

Agenda

• Priority

– Federally Registered Marks

– Common Law trademarks

Clam Corp. v. Innovative Outdoor Solutions, Inc., 89 PQ2d 1314 (D. Minn.

Dec. 2008)

• Registered trademark for ice fishing huts made in particular shade of blue

• Held: No infringement; defendant’s huts were different shade of blue, had black roofs, and had defendant’s logo prominently displayed

Hinsdale 630-325-8126 Naperville 630-355-2230 Wheaton 630-221-8300 Oak Brook 630-928-1510

Zazu Designs, Inc. v. L’Oreal

1985

2/864/866/12/86

1987

4/86 Covenant with Riviera; 1st Interstate shipment

Meets with Chemists; sales in salon

L’OrealZHD

ZHD Files Suit

11/85; 2/86: Shipments to Texas & Florida

Federal Registration

How do you establish priority?

• Common law origins: Must “win the race to the marketplace” – IPNTA 5th at p. 779

• BUT: There are some detailed rules to this race . . .

Lanham Act sec. 1, 15 USC 1051

“(a)(1) The owner of a trademark used in commerce may request registration of its trademark on the principal register hereby established . . . .”

Caselaw: Balancing two factors

• “Prevent[] entrepreneurs from reserving brand names in order to [raise rivals’ costs]” – prevent “Rent Seeking” – IPNTA 5th p.779

• “Allow[] firms to seek protection for a mark before investing substantial sums in promotion” – “Claim-staking” – IPNTA 5th p. 779

Sound familiar?

• Utility in patent law: prevent “wrong kind” of racing, but permit reasonable claiming

• Derivative works in copyright: allow owner to develop ancillary markets without fear of competition

Use requirement

• Policy justifications– Furthers purpose of trademark (I.D. source)– Prevents warehousing of trademarks– Provides notice to others

• Possible drawbacks– May cause uncertainty re: when rights attach– May result in loss of preparatory expenses

A twist: “Intent to use”

• Allows “reservation” of right to a trademark

• But ONLY if reserved mark is actually used within 6 months (extendable to 1 yr. and then three years for good cause)

Intent to use statute: Lanham Act Sec. 1(b), 15 USC 1051(b)

(b)(1) A person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may request registration of its trademark on the principal register hereby established by paying the prescribed fee and filing in the Patent and Trademark Office an application and a verified statement, in such form as may be prescribed by the Director.

Lan Act Sec 13, 15 USC 1063

(b)(2) a notice of allowance shall be issued to the applicant if the applicant applied for registration under section 1051(b) of this title. . . .

“Use in Commerce”

• Lanham Act § 1 (15 U.S.C. § 1051)– (a)(1) The owner of a trademark used in commerce

may request registration …

• Lanham Act § 45 (15 U.S.C. § 1125)– Commerce: All commerce which may lawfully be

regulated by Congress

– Bona fide use of a mark in the ordinary course of trade, and not merely made to reserve a right in a mark.

Maryland Stadium v. Becker: IPNTA 5th 786

1987

1988

1989

1990

1991

1992

Starts selling T-Shirts

New ballpark approved

BeckerMSA

Old buildings demolished

New stadium begins to rise

Named Camden Yards

First game played

Extensive advertising,promotion, and use

What constitutes “use”?

• Use in a bona fide way, targeted at customers• Key is “use” not “sale”– Sales probative of use, esp. if followed by more– But neither necessary nor sufficient• Single sale may not be sufficient (Blue Bell, Lucent)• Token sales not sufficient (Blue Bell, P&G)• Preparatory activity may be sufficient (Shalom, Becker)

– Look to totality of circumstances

Registration - Priority

• Lanham Act §7(c) (15 U.S.C. 1057(c)):– Contingent on the registration of a mark …, the

filing of the application … shall constitute constructive use of the mark, conferring a right of priority, nationwide in effect, in connection with the goods … specified … against any other person except for a person whose mark has not been abandoned and who, prior to such filing - (1) has used the mark …

State registration; common law use

• Zazu’s state registration here: for services, not goods

– “Trade name” vs. state TM register

• What if Zazu had had a state registration for goods?

Common Law Rights and Concurrent Use

• Two types of concurrent use– Different Products• E.g. Apple Records and Apple Computers• E.g. Acme Cleaners, Acme Mufflers, Acme ...•

– Different Geographic Markets• E.g. Broadway Pizza (Boston) and

Broadway Pizza (S.F.)

Common law rights

• Geographic priority determined by (1) 1st use, (2) customer associations

•Weiner King, Inc. v. Wiener King Corp., 615 F.2d 512 (C.C.P.A. 1980)

Limited area defense allows the non-registering party to claim priority in those geographic areas where he has made continuous use of the mark since before the registering party filed her application. The non-registering party is ‘‘frozen’’ in the use of his mark, however, and cannot expand it outside his existing territory or a natural ‘‘zone of expansion.’’ See Weiner King, Inc. v. Wiener King Corp., 615 F.2d 512 (C.C.P.A. 1980).

Dawn Donut v. Hart’s, 267 F2d 358 (2d Cir 1959)