23. What is trademark infringement?
Trademark infringement involves the unauthorized use of the protected mark or a similar mark to represent a business, brand, goods, or services, other than those of the trademark holder. The use of the mark must create a strong likelihood of confusion for consumers as to the origin of the goods or services. This generally means that the mark must be used to represent competitor business, brands, goods or services. The most common form of trademark infringement is through the production and sale of counterfeit goods.
• Note: It is a crime to traffic in counterfeit goods under the Stop Counterfeiting in Manufactured Goods Act (SCMGA). Penalties include imprisonment of up to 10 years and a fine of up to $2 million.
• Example: ABC Corp produces a generic brand of sunglasses that looks like a common model of Oakley sunglasses. ABC affixes a symbol that looks very similar to the Oakley trademarked symbol. This would be infringement through use of a similar mark on competing goods that is likely to cause consumer confusion as to the origin of the product.
Another form of infringement is known as “dilution”. Dilution concerns the harm to a famous mark caused by unauthorized use with non-similar goods in a manner that is not likely to cause confusion. That is, the law prevents use of certain trademarks (well-known or famous marks) by anyone other than the holder, even if there is no risk of consumer confusion. The idea is that use of the trademark may dilute the brand value of the federal trademark holder. Using a derivation of a company’s logo for a non-related product may reduce the notoriety or public recognition of the logo with the brand of the trademark holder. Dilution can occur through use of the protected mark or a confusingly similar mark. Pursuant to the Federal Trademark Dilution Act of 1995 and Trademark Dilution Revision Act, dilution of a trademark occurs when:
• A trademark becomes so commonly known by the public that it considered “famous”;
⁃ Note: This goes to the distinctiveness of the mark.
• A third party (alleged infringer) is using a mark in commerce that causes the trademark to lose its distinctiveness in the market;
⁃ Note: The third-party’s use of a similar mark with a non-related product causes the mark to no longer be associated with just the holder’s business, brand, product, or service.
• The similarity between the defendant’s mark and the famous mark gives rise to association between the marks; and
⁃ Note: The market does not have to be confused as to the origin of the third-party’s product, but it begins to associate a mark with this third-party’s product.
⁃ Example: I have a trademark on the word ziiizle, which represents the product I sell. A third party begins selling a non-similar product and calls it a zooozle. The use of a similar mark with a non-similar good starts to cause an association in the market between the marks.
• The association between the marks is likely to impair the distinctiveness of the famous mark or harm its reputation.
⁃ Note: This may include associating it with a brand that makes inferior quality products.
In an infringement action, a party will generally request an injunction against further infringement along with recovery of any damages suffered as a result of the infringement. The Lanham Act allows for the recovery of any profits generated by the infringer as a result of the infringement.
• Discussion: How do you feel about the requirement that a mark cause consumer confusion to be infringement? Do you think this should be based upon the similarity of the mark as well as the business, brand, product, or service that it represents? Why do you think courts recognize dilution of a mark when an alleged infringing mark does not create customer confusion? How should a court evaluate whether a mark is famous and whether its reputation in the market is being harmed?
• Practice Question: Garth has a pet product business that concentrates on making the highest quality doggy chew toys on the market. The price of the toys reflect its high quality. He trademarks the name Tuff Toys for the product line. Harriet’s business makes outdoor play toys for kids to take to the beach. They are very cheap and low quality. Parents buy them because they expect them to be lost or destroyed after a couple of days of play on the beach. She calls the product lines Tough Toys. Is there any argument that Harriet is infringing upon Garth’s trademark?