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Trademark – Establishment Outline

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Trademark 18-21. Establishment of Trademark Rights
Establishing Trademark Rights P.875

1. Distinctiveness

1. Classification of Marks and Requirements for Protection

2. Genericness

3. Distinctiveness of Trade Dress and Product Configuration

4. Product Configuration

5. Functionality

2. Priority: first to use in commerce

• Actual use in Commerce

• Intent-to-use application process

• Geographic limitations on trademark use

3. Federal Registration and PTO Procedures

4. Incontestability
- Help identify source and protect from consumer confusion

Purchasers may think they are buying something else (wrong source, diff quality)
- Company: Brand lose value, lose sale, lose goodwill due to customer's confusion
- Customer: Dilute value of the brand; consumer confusion, not fully informed
- Tort notion: deception of consumers
- No time limit, as long as they are used in commerce (can last forever)
Historical Background
- Early Legal Protection

Early 1800s: Common Law Tort: Palming off, piracy

Federal Trademark Act 1870 (based on IP Clause)
 Fed TM law dominates States' TM law
 Started off narrower  requiring identicality, intend to deceive

Trade-Mark Cases 1879

1881 Federal TM Act: based on commerce clause, limited to foreign commerce
- Modern History

1905 Federal TM Act: extended to interstate commerce
 broaden require likelihood of confusion and unfair

1946 Lanham Act
 S.22 federal registration constructive notice
 S.43(a) unfair competition: not limited to same goods and names

1984 Counterfeiting: ex parte seizure orders, criminal penalties 18USC s.2320

1988 TLRA: intent to use registration

1996 No anti-dilution protection (expansion)
 Can control market even when use is not confusing to consumers, if you have very famous trademark

1999 ACPA

1 Trademark
Trademark Theory
- Doesn't depend on novelty, invention, discovery, or any work of the brain
- Trademark protection is awarded merely to those who were the first to use a distinctive mark in commerce: the senior (first to use) user of a mark may prevent junior (subsequent) users from employing the same or a similar mark where there is a likelihood of confusion between the two marks
- Functions of Trademark: source identification, quality assurance, advertising vehicle
- Broad TM
o Consumer protection: lower search costs

Incentives to for businesses to invest in
 Creation of the mark
 Advertising and promoting the product in association with the mark; and
 Product related investments, e.g. high-quality raw materials, product equipment,
quality assurance techniques

Prevent competitors from freeriding
- Limited TM: Free competition, Innovation, Free speech
The Basic Economics of Trademarks and Advertising
- Early economists were critical of advertising - as it serves both useful (informative) and wasteful
(persuasive, intended to suggest that one product is superior to a similar if not identical alternative)
- Nowadays widely accepted view of consumer info economics

Trademarks economies on consumer search costs,
o informs consumer of the quality of the branded product,
o consumers benefit from concise and efficient designation of the source of products
- Fostering incentives for firms to invest in product, to develop and maintain consistent quality standards
- Foster competition among firms over a wide quality and variety spectrum
- Facilitate efficient new business models, such as franchising
- Consumers generally distinguish among 3 types of product features:
o Search attributes: e.g. color and price

Experience attributes: e.g. taste

Credence attributes: durability
- Some trademarks also signal status/ identity for some consumers:
o e.g. luxury brands like Rolex watches, T-shirts with university logo

When a trademark serves as an indication of a brand, it primarily associated with general qualities and attributes  but overtime they become something much more: a signal of values, qualities and even a particular lifestyle

Counterfeit goods could conceivably divert some consumers who would otherwise purchase the authentic article, though knowing it is not genuine
- Protection entails server types of costs

Generic/ descriptive terms as trademark can increase search costs and impair competition by raising the marketing costs of competitors, e.g. "cookies"
 Greater costs when trademark law protects characteristics of the product themselves,
preventing competitor form using the word to describe its product would bring inconvenience, forcing them to find another word that consumers would understand

Admin and maintenance costs
 Mark owners must police their marks to prevent unauthorized use and supervise licensees to ensure that quality standards are maintained 2 Trademark

3 Trademark
Subject Matter
MML 861-75; 15 U.S.C. §§ 1125(a), 1127
What can be protected as Trademark? P.870
 Company names can become product names  if that co. gets exclusive right to describe it product with that name, customers might encounter difficulty in knowing what to ask for
 Only some terms and symbols are eligible for trademark protection
 Degree or protection depend on the strength of the mark
Classification of the term:
 Decreases in strength as they increase in natural association

1. Arbitrary/ fanciful:
 Word or phrase that bears no relationship to the product it describes
 strongest, as any value the possess in terms of name recognition comes from the corporate use of the name, rather than natural association in people's mind

2. Suggestive: Suggest a product in people's minds

3. Descriptive: Geographic designations/personal names, describe the product/ service offered
 Only protected upon acquiring source-identifying meaning to consumers

4. Generic: Natural way to refer to that type of product, ineligible for trademark protection
(1) Trademarks, Trade Names, and Service Marks
- Laham Act s.45 Definition of Trademark

"The term "trademark" includes any word, name, symbol, or device, or any combination thereof -
 (1) used by a person, or
 (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this
to identify and distinguish his or her goods, including a unique product,
from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown."
o Used or about to be used in commerce

Source of good should be indicated, even when source is unknown

Provided advantages to registration of trademarks

Provided a separate statutory prohibition against unfair methods of competition that protects unregistered marks

There are ways to register trademarks

Broadly understood: words, logos, taglines are protectable

Whether you can claim color, fragrances, sound as trademark?
 Color of a dry-cleaning mats, small of playdough…etc.Laham Act s.45 Definition of Service Mark

The term "service mark" includes any word, name, symbol, or device, or any combination thereof -
 (1) used by a person, or

4 Trademark
(2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this
to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown."
Similar to trademark, but to identify services rather than goods
Subject to the same rules as trademarks
E.g. Starbucks - restaurant, café and coffee house services


oLaham Act s.45 Definition of Trade name

"Trade name" and "commercial name" mean any name used by a person to identify his or her business or vocation. §45

Cannot be registered under federal law (unless associated with a good or service)
o Protectable under common law: against confusingly similar company names

Can be registered under state TM laws

Permit trade name registration even without association with particular goods or services

(2) Certification and Collective Marks
- Certification Mark

Definition s.45 "The term "certification mark" includes any word, name,
symbol, or device, or any combination thereof -
 (1) used by a person other than its owner, or
 (2) which its owner has a bona fide intention to permit a person other than the owner to use in commerce and files an application to register on the principal register established by this Act,
to certify regional or other origin, material, mode of manufacture, quality,
accuracy, or other characteristics of such person's goods or services or that the work or labor on the goods or services was performed by members of a union or other organization."
o Lanham Act 45; 15 USC 1127
 Certification marks are generally used by trade associations or other commercial groups to identify a particular type of goods

Similar to trademark, but used to indicate certain characteristics that are true
 But worry that owner of the mark would abuse the Certification and put it on their own products that doesn't deserve it to mislead consumers; and/or refuse to give their competitors the certification when they deserve it
 Should have all competitors to be on equal standing

 (1) Quality of Goods
 (2) Regional origin
 (3) Produced using union labor

Anti-use by Owner rule
 Certification Mark owner is not applying the mark systematically, would be scrutinized by Trademark Office
 C.f. trademark - no internal scrutiny on whether product is up to the standard

A common law certification mark can be protected without being registered 5 Trademark

E.g. Roquefort Cheese: made from sheep's milk and cured in the natural caves of
Roquefort, France, according to time-honored Roquefort tradition

6 TrademarkCollective Marks

Definition s.45
 The term "collective mark" means a trademark or service mark-
 (1) used by the members of a cooperative, an association, or other collective group or organization, or
 (2) which such cooperative, association, or other collective group or organization has a bona fide intention to use in commerce and applies to register on the principal register established by this Act,
and includes marks indicating membership in a union, an association, or other organization

Meant to bear the "seal of approval" of a central organisation,
 can be cancelled on the ground that the organisation no longer exercise sufficient control over its members to ensure consistent product standards

Members of a group to put a mark on what they have done
 E.g. professional golfer, only member of the group can stick it on their things

 (1) Collective trademarks and service marks used to identify goods and services of members
 Used by members to identify that the source is a member of the collective,
e.g. members use the mark to distinguish their products from those of nonmembers
 The collective neither sells goods nor performs services under the collective mark, but may advertise/ promote goods to services sold or rendered by its members under the mark
 (2) Collective membership marks to identify membership within the Collective
 Only to indicate the person displaying the mark is a member of the organised collective group

closely related to certification marks - collective marks involve membership in an organization, while certification marks designate that seller's goods meet certification standards set by trademark owner's organization

not subject to anti-use by owner rule (under 1988 Amendments)
o The collective group itself may be engaged in the marketing of its own goods or services under a particular mark, but that mark is not a collective mark, but a trademark for the collective's good/ service mark of the collective's services

(3) Trade Dress and Product Configurations
- Trade Dress:
o design/ packaging of materials,
o or even the design or packaging of a product itself, if the packaging or product configuration
(shape) serve the same source identifying function as trademarks
- Possible to register both trade dress and product configuration as trademark

Total image and overall image of the design of packages or products that the maker would want to use as a mark

E.g. shape of Coca-Cola bottle, design of a shoe
- Due to complexities of trade dress protection, many companies forgo registration of trade dress and look to Lanham s.43(a), 15 USC 1125(a) instead 7

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