What Is Trademark Infringement Under the Lanham Act?
Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the license). In the United States, trademark law is governed by the Lanham Act.
The Lanham Act, officially known as the Trademark Act of 1946, is a federal statute that governs trademarks, service marks, and unfair competition. It provides protection to the owner of a federally registered mark against the use of similar marks if such use results in a likelihood of confusion.
In the context of the Lanham Act, a claim of trademark infringement requires the following elements:
Ownership of a Valid Trademark: The party claiming infringement must show that it has a valid, legally protectable trademark. This can either be a federally registered trademark or an unregistered trademark for which the party has established common law rights through actual use in commerce. The strength of the mark, whether it is generic, descriptive, suggestive, arbitrary, or fanciful, can also impact its protectability.
Unauthorized Use of the Trademark: The party alleging infringement must show that the defendant used the mark in commerce without the owner’s permission. “Use in commerce” includes any use of the mark on products or services that are being sold or transported in more than one state or internationally.
Use in Connection with the Sale, Offering for Sale, Distribution, or Advertising of Goods or Services: The alleged infringer must have used the mark in connection with selling, advertising, or distributing goods or services.
Likelihood of Confusion: The use of the mark must be likely to cause confusion, mistake, or deceive consumers. Courts typically consider a range of factors to determine this, often referred to as the Polaroid factors (from the case Polaroid Corp. v. Polarad Elecs. Corp.). These include the strength of the mark, the proximity of the goods, the similarity of the marks, evidence of actual confusion, the marketing channels used, the type of goods and the degree of care likely to be exercised by the purchaser, the defendant’s intent in selecting the mark, and the likelihood of expansion of the product lines.
Penalties for trademark infringement under the Lanham Act can include injunctions (orders to stop using the trademark), monetary damages, profits the defendant made from the infringement, and occasionally the cost of legal fees.
Apart from direct infringement, the Lanham Act also addresses issues such as trademark dilution, false advertising, and cybersquatting.
How Is A Trademark Likely To Cause Confusion In The Marketplace?
The likelihood of confusion between trademarks under the Lanham Act is determined through a multi-factor test, often referred to as the Polaroid factors from the case Polaroid Corp. v. Polarad Elecs. Corp.
This test involves an evaluation of several key factors to ascertain whether an average consumer is likely to be confused between two trademarks. It’s important to note that not all factors need to be met, and the weight of each factor can vary depending on the case. Here are the factors generally considered:
Strength of the Trademark: A strong or distinctive mark has a higher degree of recognition among consumers and is given wider protection. A mark can be strong due to its inherent nature (being fanciful, arbitrary, or suggestive) or through acquired distinctiveness (also known as secondary meaning).
Similarity of the Trademarks: This factor looks at the visual, aural, or conceptual similarity of the two marks. If two marks look or sound alike, or convey similar meanings, it is more likely they will cause confusion.
Similarity of the Products or Services: If the products or services offered under the two marks are similar or related, there’s a greater likelihood of confusion.
Likelihood of Expansion: If it’s likely that either company will expand its product or service lines, entering into the other’s market, it could lead to confusion.
Evidence of Actual Confusion: Courts will consider any evidence that consumers have actually been confused by the two marks. This could include consumer surveys, examples of mistaken identity, and more.
Marketing Channels Used: Overlapping marketing channels, like the same types of stores or similar advertising media, can increase the likelihood of confusion.
Degree of Consumer Care: If consumers are likely to exercise a high degree of care in purchasing the goods or services (like expensive or specialized products), they’re less likely to be confused. On the contrary, for impulse purchases, confusion is more likely.
Defendant’s Intent: If the alleged infringer chose the mark with the intent to deceive consumers or capitalize on the trademark holder’s reputation, courts will consider that when assessing the likelihood of confusion.
It’s important to understand that the ultimate decision on whether there’s a likelihood of confusion will depend on the specific facts of each case. The courts balance these factors to decide on a case-by-case basis.
Where Are Trademark Infringement Claims Resolved?
Trademark infringement claims in the United States can be resolved in several arenas. One of the most common places where trademark disputes are resolved is in federal court. This is because trademark law is largely governed by federal law, specifically the Lanham Act. If the plaintiff and the defendant are from different states or if there is a substantial amount of money involved, the case can also be heard in federal court under diversity jurisdiction. It’s also important to note that federal courts have exclusive jurisdiction over cases involving federally registered trademarks.
State courts can also hear trademark infringement cases, particularly when they involve state trademark registrations or common law trademark rights, which are rights based on actual use of the trademark rather than on federal registration.
Another arena where trademark infringement claims can be resolved is before the Trademark Trial and Appeal Board (TTAB) of the United States Patent and Trademark Office (USPTO). The TTAB handles proceedings like oppositions (disputes about whether a mark should be registered) and cancellations (disputes about whether a registered mark should be cancelled).
Alternative dispute resolution methods, such as arbitration and mediation, are also used to resolve trademark disputes. These are less formal, less expensive, and faster than litigation, and the parties have more control over the process. Arbitration and mediation can be used if both parties agree to it, and sometimes a contract between the parties will require it.
Lastly, in cases of domain name disputes involving trademarks, such as cybersquatting, the issue can be addressed through an administrative proceeding under the Uniform Domain-Name Dispute-Resolution Policy (UDRP) administered by the Internet Corporation for Assigned Names and Numbers (ICANN).
Remember that the best venue to resolve a trademark infringement claim often depends on the specific circumstances of the case, and it’s advisable to consult with a legal professional in such situations.
What Penalties and Remedies Can Be Pursued In A Trademark Infringement Action?
Under the Lanham Act, several remedies and penalties may be granted to a plaintiff in a trademark infringement action.
One of the most common remedies is an injunction, which is a court order that prohibits the defendant from using the infringing trademark. An injunction may be preliminary, which means it is in effect while the case is ongoing, or permanent, which means it is in effect after the case has been decided.
Monetary damages may also be awarded to the plaintiff. These can include the defendant’s profits from the infringement, any damages sustained by the plaintiff, and the costs of the action. In assessing damages, the court may consider evidence of the defendant’s sales, and the plaintiff must show only the amount of the defendant’s gross revenue; the defendant must prove all elements of cost or deduction. However, the plaintiff must show that the infringement was willful to recover the defendant’s profits.
In some cases, the court may also award enhanced damages, which are typically up to three times the actual damages, for willful infringement. Furthermore, in exceptional cases, the court may award reasonable attorney fees to the prevailing party.
In the case of counterfeiting, the Lanham Act provides for even more severe penalties, including statutory damages ranging from $1,000 to $200,000 per counterfeit mark per type of goods or services, or up to $2,000,000 in the case of willful counterfeiting.
It’s important to note that while the Lanham Act sets out the broad parameters for these remedies, the specifics can vary widely depending on the circumstances of each case, the discretion of the court, and other factors.