Knowing when your company’s brand may be at risk could help you save the identity of your business.
It happens as often as you may expect. One day, you’ve managed to come up with the perfect name for your company, product or services, the next day you receive a cease and desist letter from someone claiming to own the rights to your brand name. When something like this happens, how do you know if they do own the rights to the name? Can someone actually force you to change your company’s name that you’ve already invested money and time into?
While every case is unique and there may not always be a straightforward “yes” or “no” answer to these questions, there are a few basics about trademark law that could help you to steer clear of these kinds of situations.
Similarity & Confusion
Trademark infringement is the unauthorized use of a trademark or service mark in connection with goods and/or services that is likely to cause confusion, deception, or mistake about the source of the goods and/or services. In the landmark case, A&H Sportswear, Inc. v. Victoria's Secret Stores, Inc., the court confirmed that the proper standard for determining whether infringement has taken place is the “likelihood of confusion” test.The likelihood of confusion test actually dates back to 1961 in what’s referred to as the Polaroid case. In that case, the court set out eight factors that can be used to determine whether a likelihood of confusion exists between different trademarks. Since then, the likelihood of confusion test has been adopted in one way or another by all thirteen federal circuits in the United States.
Although the actual tests across the country may vary, there are generally two key considerations in any likelihood of confusion analysis: (1) the similarities between the compared marks and (2) the relatedness of the compared goods. In addition to these two key considerations, there is also the universally accepted practice of analyzing these factors on a sliding scale basis, meaning that the strength of one factor can offset the weakness of another factor in determining whether a likelihood of confusion exists between trademarks.
In analyzing similarity, the trademarks are compared in their entireties for similarities in appearance, sound, connotation, and commercial impression. In applying these principles, it turns out that similarity means more than being identical to one another or even having a similar spelling. Whether a trademark looks the same, sounds the same or feels the same are all factors that can weigh towards a finding of there being a similarity between the brands.
Senior Users vs. Junior Users
Generally speaking, in the United States, the first user of a trademark is considered the senior user in the geographical area that the trademark is used in. The senior user of a trademark and has priority rights over any subsequent, or junior user, of the trademark in that geographical area of use. Additionally, a party who files a valid federal trademark application for a mark that is in use in commerce is provided with such priority use rights throughout the country.
Determining who the senior user is and who the junior user is can be easy in some cases and quite difficult in others. Where a one or both parties has a federally registered trademark, the first use date will be included in the trademark registration. However when dealing with an unregistered trademark, determining who has the priority of use can be very tricky. In making such determination, some courts look not only at when the first sale of a product or service was made, but also at when the brand was used in advertising brochures, in catalogues and newspapers, and in press releases and trade publications.
Consequences, Remedies & Court Orders
Where a party’s use of a brand name infringes upon the trademark rights of another party who has the senior priority rights of use over the infringer, a court may order the infringer to cease using the trademark, among other forms of remedies which may be available to the senior user. In the United States, trademarks are protected under federal law through the Lanham Act, also known as the Trademark Act of 1946. The Lanham Act provides that in cases where a party has infringed upon another’s trademark that, a court may grant injunctive relief, or order a party to refrain from using another party’s trademark. Additionally, a court may order that the prevailing plaintiff in such case be awarded; (1) the defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.
Additionally, the recent 2020 Supreme Court decision in Romag Fasteners, Inc. v. Fossil, Inc., et al., has resolved a previous split between federal circuits by holding that a plaintiff in a trademark infringement suit is not required to show that a defendant willfully infringed the plaintiff’s trademark as a precondition to an award of profits.
With the holding in Romag Fasteners, Inc., the risks that run with engaging in trademark infringement have never been higher and in turn, the importance of ensuring that your company’s name and the brand of your products and services are unique have never been greater.
15 U.S. Code § 1114 A&H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 37 F.3d 198 (2000) Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (1961) Herbko Int’l, Inc. v. Kappa Books, Inc., 308 F.3d 1156, 1164-65 (2002) In re E. I. DuPont de Nemours & Co., 476 F.2d 1357, 1362 (1973) Stone Lion Capital Partners, LP v. Lion Capital LLP, 746 F.3d 1317, 1321 (2014) 15 U.S.C. § 1057(c) Malcolm Nicol & Co. v. Witco Corp., 881 F.2d 1063 (1989) 15 U.S.C. §§1051 et seq. 15 U.S. Code § 1116  15 U.S. Code § 1117(a)  Romag Fasteners, Inc. v. Fossil, Inc., et al., 590 US _ (2020)
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