Legal Care for Your Business & Product Name
Richard Stim, Attorney and Stephen Elias, Attorney
August 2010, 9th Edition
Protect your trademark, protect your business.
Trademarks -- the names and symbols that identify your business, brand, and products in the marketplace -- are important assets that you need to choose carefully and vigilantly defend. Using the information in this all-in-one reference, you'll learn how to protect:
- business names
- product names
- product packaging
- domain names
- anything that identifies your company, product, or service!
Trademark provides you with the plain-English explanations and step-by-step instructions you need to navigate the requirements of the U.S. Patent & Trademark Office (USPTO) and successfully register your unique mark. Learn how to:
- choose marks that competitors can't copy
- search for existing marks that might conflict with yours
- register a name or other mark with the USPTO
- protect and maintain your marks' legal strength
- keep your mark safe from infringement
- understand and resolve trademark disputes outside the courtroom
The 9th edition of Trademark provides the most current information on trademark statutes and case law, and the latest registration processes, including online registration. Plus, you'll get a fully up-to-date glossary of trademark terms and FAQs from Dear Rich, co-author Richard Stim's popular intellectual property blog.
“Get tips to help you choose and protect a name, logo and other unique items that identify your company.”-Houston Chronicle
“Searching for a winning business or product name? Or have a distinctive logo or slogan to protect with a trademark or service mark? You will find sound advice in this book.”-San Francisco Examiner
Attorney Richard Stim specializes in small business, copyright, patents, and trademark issues at Nolo. He practices law in San Francisco and has represented photographers, software developers, craftspeople, publishers, musicians, and toy designers. He is the author of many books, including Music Law: How to Run Your Band's Business Patent, Copyright & Trademark: An Intellectual Property Desk Reference, and Profit From Your Idea. Stim regularly answers readers' intellectual property questions at Dear Rich: Nolo's Patent, Copyright & Trademark Blog. Rich is also an author on Intellectual Property Law Firms. Stim also produces audiobooks, such as Nolo's Crash Course in Small Business Basics, and performs and records with two bands, MX-80 and angel corpus christi. You can also find Rich on Google Plus.
Until his death in late 2011, Stephen R. Elias was a practicing attorney, active Nolo author, and president of the National Bankruptcy Law Project. He was an important part of Nolo for more than 30 years, and was the author or coauthor of many Nolo books, including Bankruptcy for Small Business Owners. Other titles include Special Needs Trusts: Protect Your Child's Financial Future, How to File for Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, and Legal Research: How to Find and Understand the Law. He was also one of the original authors of Nolo's bestselling WillMaker software. Steve held a law degree from Hastings College of Law and practiced law in California, New York, and Vermont before joining Nolo in 1980. He was featured in such major media as The New York Times, The Wall Street Journal, Newsweek, Good Morning America, 20/20, Money magazine, and more. The blog he began on bankruptcy and foreclosure law continues at Nolo's Bankruptcy & Foreclosure Blog.
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20 Frequently Asked Trademark Questions
Your Legal Companion for Trademarks
- What’s New Since the Last Edition?
1. A Trademark Primer
- Trademarks and Trademark Law
- Basic Principles of Trademark Law
- The Role of Federal Registration in Protecting Trademarks
- Not All Business Names Are Trademarks
- Trade Name Formalities
- Trade Dress and Product Designs
- Sources of Trademark Law
- The Difference Between Trademark and Copyright
- The Difference Between Trademark and Patent
2. Trademark, Domain Names, and the Internet
- How to Clear and Register Domain Names
- What to Do If the Domain Name You Want Is Already Registered
- Domain Names and Trademarks
- Other Trademark Issues in Cyberspace
3. How to Choose a Good Name for Your Business, Product, or Service
- Anatomy of a Product or Service Name Trademark
- Distinctive Names Make Legally Strong Trademarks
- How Trademark Law Treats Marks With Common Terms
- What Makes a Distinctive Trademark a Legally Strong Trademark?
- Guidelines for Making a Mark Distinctive
- Marketing Considerations When Choosing a Name Mark
4. Trademark Searches—What They Are and Why You Should Do One
- What Is a Trademark Search?
- Why Do a Trademark Search?
- What Resources Are Used in a Trademark Search?
- Where Are Trademark Search Resources Located?
- Different Levels of Trademark Searches—What They Are; When They’re Appropriate
- Planning Your Trademark Search
- Using a Professional Search Service
- Using a Patent and Trademark Depository Library to Do Your Own Search
- Does Your Failure to Search Mean You Acted in Bad Faith?
5. How to Do Your Own Trademark Search
- Meet TESS—The Trademark Electronic Search System
- Getting Started With TESS
- Understanding the TESS Structured Form Search
- Tips on Using the TESS Structured Form Search
- Trademark Searching With TESS: An Example
- Understanding the TESS Free Form Search
- Understanding the Results of Your Search
- An Introduction to SAEGIS—A Fee-Based Search System
- Searching for Designs
- Searching State-Registered Trademarks and Trade Names
- Searching for Trade Names and Unregistered Marks
6. How to Evaluate the Results of Your Trademark Search
- What’s Involved in Evaluating Trademark Search Results?
- What Is the Likelihood of Customer Confusion?
- An Overview of How Marks Are Evaluated for Their Potential to Cause Customer Confusion
- How Closely Related Are the Goods and Services?
- Do the Goods or Services Compete?
- How Similar Are the Marks?
- Additional Factors
- Final Factors
- How to Read a Trademark Search Report
7. Federal Trademark Registration
- Brief Overview of Federal Registration
- What Marks Qualify for Federal Registration
- If You Haven’t Started Using Your Mark, Should You File an Intent-to-Use Application?
- What Examples of Your Mark Will You Submit With Your Application?
- What International Class Is the Best Fit for Your Product or Service?
- Deciding How Many Marks You Want to Register
- Applying for Registration Online
- If You Are Filing by Mail
- What Happens Next?
- Communicating With the PTO
- If the Examiner Issues a Rejection Letter
- Follow-Up Activity Required for Intent-to-Use Applications
- Follow-Up Activity Required After Registration
8. How to Use and Care for Your Trademark
- Use of the Trademark Registration ® Symbol
- Use of the TM or SM Symbol for Unregistered Trademarks
- File Your Section 8 and 15 Declarations
- File Your Section 8 Declaration and Section 9 Application for Renewal
- Use It or Risk Losing It
- Maintain Tight Control of Your Mark
- Use the Mark Properly—Avoid Genericide
- Transferring Ownership of a Trademark
9. Evaluating Trademark Strength
- A Brief Review of What Makes a Strong Mark
- For Marks Consisting of Words, Identify the Distinctive Part of the Mark
- Assess the Legal Strength of the Trademark Aspect of Your Word Mark
10. Sorting Out Trademark Disputes
- Trademark Infringement
- Determining Priority in an Infringement Dispute
11. If Someone Infringes Your Mark
- What Litigation Costs
- How Much Is Your Mark Really Worth to You?
- Negotiate—Don’t Litigate
- How to Handle an Infringer
12. If Someone Claims That You Infringed a Trademark
- What the Complaining Party Can Do to You
- Steps You Should Take
13. International Trademark Protection
- Where Will You Seek Protection?
- How Will You Register Abroad?
14. Help Beyond This Book
- Nolo: Your One-Stop Trademark Resource
- Finding Trademark Laws and Information on the Internet
- Doing Your Own Research in a Law Library
- Finding a Lawyer
A. International Classifications of Goods and Services
B. Glossary of Terms
C. Selected Pages From Thomson CompuMark Trademark Research Report
A Trademark Primer
Trademarks and Trademark Law.................................................. 17
What Are Trademarks?............................................................. 18
What Is Trademark Law, and Why Do You Need to Know About It? 21
Basic Principles of Trademark Law.............................................. 22
Strong Marks Versus Weak Marks: What Trademark Law Protects 25
Ownership of a Trademark: The First-to-Use Rule................... 25
The Role of Customer Confusion in Trademark Law............... 28
Special Treatment for Famous Marks: The Dilution Doctrine.. 29
How Trademark Law Protects Trademarks.............................. 30
The Role of Federal Registration in Protecting Trademarks......... 31
The Principal Register............................................................... 32
The Supplemental Register....................................................... 34
State Trademark Registers....................................................... 34
Not All Business Names Are Trademarks .................................... 35
Trade Name Formalities................................................................ 36
Trade Name Registration Requirements................................... 37
The Legal Relationship Between Trade Names and Trademarks 41
Trade Dress and Product Designs................................................ 42
Trade Dress Can Be Registered With the PTO........................ 45
Likelihood of Confusion Is Required.......................................... 45
Functional Trade Dress Is Not Protected as a Trademark....... 45
If Your Product Design Is Both Functional and Novel............... 47
Sources of Trademark Law........................................................... 47
The Federal Lanham Act........................................................... 48
State Trademark and Unfair Competition Laws........................ 48
Common Law of Trademarks................................................... 49
The Difference Between Trademark and Copyright..................... 50
The Difference Between Trademark and Patent.......................... 51
This chapter provides an introduction to the basics of trademark law. It will give you the background necessary to understand your rights and obligations in choosing and using a trademark to identify your business and products in the marketplace.
Trademarks and Trademark Law
What’s in a name? To Shakespeare, “A rose by any other name would smell as sweet.” But what is true in love can be the opposite in business. IBM would not smell half so sweet by another name, nor would Google, Apple, McDonald’s, or Levi’s. In the business world, the name of a successful product or service contributes greatly to its real worth. Every day, names such as Allendale Auto Parts or Building Blocks Day Care identify these businesses for their customers, help customers find them, and (assuming they provide a good product or service) keep the customers coming back again and again.
And it’s not just a clever business or product name that pulls in the customers. Equally important in the vast U.S. consumer marketplace are the logos, packaging, innovative product shapes, cartoon characters, website address names (domain names), and unique product characteristics that businesses are using to hawk their wares. Even the look and feel of a business’s website is important for a business to identify itself and its products in the marketplace.
All of these devices—business and product names, logos, sounds, shapes, smells, colors, packaging—carry one simple message to potential customers: Buy me because I come from XYZ Company. To the extent that these devices are unusual enough to distinguish their underlying products and services from those offered by competitors, they all qualify as trademarks.
If a small business owner were to remember only one point in this book, it should be this: The instant a business or product name or any other identifying device is used in the marketplace—be it in advertising, on a label, on an Internet site, or in any other way intended to reach out to potential customers—it falls within the reach of trademark law. Trademark law will determine who wins a dispute over the use of the name. Few business owners can afford to disregard or run afoul of this body of law.
What Are Trademarks?
Trademarks fall into two general categories: marks that identify goods or products (known as trademarks) and marks that identify services (known as service marks). Though you may occasionally see this distinction in action, these terms are, in fact, legally interchangeable, and the even more general term—mark—commonly is used to refer to both. In this book, we tilt towards the terms “trademark” and “mark” and -seldom use “service mark.”
Technically speaking, a trademark is any word, design, slogan, sound, or symbol (including nonfunctional unique packaging) that serves to identify a specific product brand—for instance, Xerox (a name for a brand of photocopiers), Just Do It (a slogan for a brand of sport shoes and sportswear), Apple’s apple with a bite missing (a symbol for a brand of computers), and the name Coca-Cola in red cursive lettering (a logo for a brand of soft drink).
A service mark is any word, phrase, design, or symbol that operates to identify a specific brand of service—for instance, McDonald’s (a name for a brand of fast food service), ACLU (a name for a brand of legal organization), Blockbuster (a name for a brand of video rental service), the U.S. Postal Service’s eagle in profile (a symbol for a brand of package delivery service), CBS’s stylized eye in a circle (a symbol for a brand of television network service), and the Olympic Games’ multicolored interlocking circles (a symbol for a brand of international sporting event).
In addition to trademarks and service marks, federal trademark law protects two other types of marks—certification marks and collective marks.
Certification marks are only used to certify that products and services that are manufactured or provided by others have certain qualities associated with the marks. For example, Good Housekeeping Seal of Approval (a product approved by a homemaking magazine), Roquefort (a cheese from a specific region in France), and Harris Tweeds (a special weave from a specific area in Scotland) are all certification marks. Among the characteristics that this type of mark may represent are regional origin, method of manufacture, product quality, and service accuracy.
A collective mark is a symbol, label, word, phrase, or other distin-guishing mark that signifies membership in an organization (a collective membership mark) or that identifies goods or services that originate from the member organization (a collective trademark). For example, the letters ILGWU on a shirt are a collective mark identifying the shirt as a product of members of the International Ladies Garment Workers Union. It distinguishes that shirt from those made by nonunion shops.
Another example of a collective membership mark is the familiar FTD found in many flower shops. This mark means that the flower shop is part of a group that participates in a national flower delivery system. To belong to that group—and thus obtain authorization to use the FTD mark—the shop must pay steep membership fees and conform its practices to the rules set out by the group.
Because a small business’s need for collective or certification marks is relatively rare, we don’t address them further in this book. If you need help in creating and protecting this type of mark, consult a trademark attorney. (See Chapter 14, “Help Beyond This Book.”)
Although most small businesses rely on their business names as their primary trademarks, there are many other ways for a business to inform consumers about itself, its services, and its products.
Next to a name, the most popular commercial identifier is the logo, a pure graphic or a combination of a graphic and some aspect of the business name. Examples abound. The block-lettered Ford set against a blue oval, the distinctive blue lettering used for IBM, the gold McDonald’s arch, the universally recognized swirl used to denote Nike products, and the blue cross used to denote health care services all demonstrate how powerfully a logo can garner instant product or business recognition.
Another popular form of trademark is the marketing slogan. “Obey your thirst” (Sprite); “It’s everywhere you want to be” (Visa); “I love what you do for me” (Toyota); “Just Do It” (Nike); “Life is a sport; drink it up” (Gatorade), and “Life is a journey; enjoy the ride” (Nissan) are all devices designed to build customer recognition of the underlying businesses and their products, and therefore each qualifies as a trademark that deserves the same protection under trademark law as a business name.
Packaging, Decor, Product Shape, and Web Pages
In recent decades, a type of trademark known as trade dress has become more important to businesses trying to build customer recognition. Trade dress includes product packaging, external and internal store decor, product shapes, and perhaps the look and feel of a business’s Web page. As long as the appearance of the product or its packaging operates as a trademark, it will be treated and protected as a trademark, assuming it meets other trademark requirements, such as distinctiveness.
Colors help to distinguish products and services. A box of film that is gold and black connotes a Kodak product. A yellow arch indicates McDonald’s food services. When color is used with a name or graphic design of a trademark (such as the red lettering and blue star of Converse footwear or the yellow and black coloring of the Cliffs Notes book series) it is registered as an element of the trademark.
It was not until recently that the United States began to protect combinations of colors or single colors by themselves—that is, without any additional text or graphics. In the 1980s, Owens-Corning registered the color pink for its fiberglass insulation and, in 1995, the Supreme Court ruled that a manufacturer of dry-cleaning press pads could claim registration for a green-gold color. (Qualitex v. Jacobson Products, 514 U.S. 159 (1995).) Also, a federal appeals court has ruled that a color combination (signifying different tensions in an exercise band) could be protected. (Fabrication Enters. v. Hygenic Corp., 64 F.3d 53 (2d Cir. 1995).)
Colors may not be protected on the grounds that they are inherently distinctive. Rather, to obtain protection, the owner of a potential mark for color must establish that, given its use in the marketplace, consumers have come to associate the color with the owner’s products or services, as indeed was the case with the Owens-Corning pink fiberglass and the green-gold color for the dry-cleaning pads.
Internet Domain Names
Internet domain names are the names assigned to Internet sites for the purpose of uniquely identifying the sites and providing an intuitive way for potential visitors to locate them. (We discuss domain names separately in Chapter 2, “Trademarks, Domain Names, and the Internet.”)
‘No’ to Orange Flavor
Flavors, like odors and colors, can be federally registered as trademarks. The challenge is to demonstrate that flavor is identified with the source and is not functional. For example, the Trademark Trial and Appeals Board refused to permit federal registration of an orange flavor as a trademark for antidepressants. The Board stated that the orange flavor was functional and therefore incapable of serving as a trademark—it is a preferred flavor for orally administered pharmaceuticals. (In re Organon N.V., 79 U.S.P.Q.2d 1639 (TTAB 2006).)
What Is Trademark Law, and Why Do You Need to Know About It?
In the real world, once customers come to associate a mark with a particular business or product, would-be competitors frequently copy some or all aspects of the mark—its sound, its appearance, its meaning—in an effort to lure customers away from the original business. Even a well-intentioned business owner may violate trademark laws by unwittingly picking a new business name, logo, or other type of trademark that conflicts in some way with a mark already in use somewhere in this large country of ours.
For these and other reasons, the U.S. marketplace is rife with trade-mark conflicts. It is the job of trademark law to sort out these conflicts in an equitable and consistent manner. It is this book’s job to introduce you, the reader, to how trademark law works, so that you will know how to avoid legal trouble when deciding how to identify your business and products in the marketplace and what to do if, despite your best efforts, you end up in a trademark conflict anyway.
Basic Principles of Trademark Law
Trademark law is the body of principles that the courts use to decide disputes regarding names or other devices being used to identify goods and services in the marketplace.
Trademark law comes from many sources: federal and state trade-mark statutes, federal and state statutes defining and prohibiting “unfair competition” between businesses, and federal and state cases interpreting these laws. (Unfair competition refers to the legal rulings and statutes that protect against unethical business practices.) The federal law that governs trademark rights and registration is known as the Lanham Act. Although there are subtle differences in all these sources of law dealing with how businesses use commercial identifiers, federal trademark statutes and cases govern most trademark disputes. (Later in this chapter, we provide more information on these sources of trademark law.)
Here, briefly, are some basic concepts of federal trademark law that you will need to understand before we go any farther (we provide more details as we go along):
The first business to use a trademark in the marketplace owns it as against later users.
To qualify as a trademark, a name, logo, or other device used by a business in its marketing activities must either: (1) be unique enough to earn customer recognition on its own (referred to in trademark law as inherent distinctiveness) or (2) have earned customer recognition through its continued use over time (known in the trade as “acquired distinctiveness” or “secondary meaning”).
A trademark owner can sue in federal court to stop another business from using the same or similar trademark if the owner’s mark is famous or the use by the other business would cause potential customers to confuse one business or product with another.
The more distinctive a trademark is, the easier it is for its owner to get the court to stop its use by others.
The usual court remedy in trademark disputes is to order the loser to stop further use of the trademark in question. This can be painful, because business goodwill often is intimately connected with the business’s mark, and expensive because all of the items that carry the mark will have to be pulled from use.
If the court finds that one business deliberately used a famous or distinctive mark belonging to another business, the offending business can be ordered to pay substantial money damages to the trademark owner.
The court will usually find that a mark was deliberately copied if the mark was listed on the federal trademark Principal Register at the time it was copied.
Ideally, just knowing basic trademark principles should be enough to answer all your questions and get you started on the road to choosing a clever name for your business or product. But not so fast. The phrases “customer confusion” and “distinctive mark” need some definition. Unfortunately, Congress has avoided hard definitions and instead opted to let judges decide, on a case-by-case basis, whether a particular mark is famous or risks confusion by customers with an existing mark. Although we provide some guidelines in this book for you to use when you are faced with interpreting these terms, the rock-bottom rules for dealing safely with the ambiguities in trademark law are these:
Don’t choose a business or product name that is the same as that used nationally by a large company. Even if you’re in the right on some abstract level, the big company will most likely try to legally terrorize you into dropping the mark.
Don’t choose a trademark that is the same—in appearance, sound, or meaning—as a federally registered mark, unless the registered mark is used for a product or service that is definitely very different from the ones offered by your business.
Don’t try to piggyback your marketing efforts on a well-known trademark belonging to another business. For example, don’t call your new Web design service “Jetscape.”
Don’t choose a domain name for your business that is the same as the trademark of an existing business; if you do, you may be accused of infringement (if you have similar products or services), dilution (if the existing business has a famous trademark), or cybersquatting (if you acquired the domain name in bad faith).
These rules are easy to understand. A fifth rule is not: Stay away from existing marks that resemble yours if there’s a likelihood that customers would be confused by use of the two marks. Using the guidelines we lay out later in the book (see Chapter 3, “How to Choose a Good Name for Your Business, Product, or Service”), you should be able to select an appropriate name or to recognize when you need a professional opinion (see “When a Trademark Lawyer May Help,” just below).
See an Expert
When a trademark lawyer may help. If any of these rules get in your way (you’ve got a hot name for your business and you want to run with it), a trademark lawyer can help you decide whether your situation is an exception to these rules and what you risk by going ahead with your proposed mark (see Chapter 14, “Help Beyond This Book,” for information on how to find a trademark lawyer).
Strong Marks Versus Weak Marks: What Trademark Law Protects
Trademark protection is based on a “strength” classification system. Distinctive trademarks are strong and protectible. Trademarks that are not distinctive are considered weak and cannot be registered or protected unless the trademark owner creates consumer awareness.
Strong marks include coined words, such as Polaroid, arbitrary terms, such as Apple for computer products, or terms that have a suggestive quality without describing the goods or services, for example Roach Motel. These marks are all born strong and are so memorable or clever that they are classified as “inherently distinctive.”
Weak marks, such as Healthy Favorites, Beef & Brew, or Chap Stick, describe some quality, ingredient, or characteristic of the goods and services. Many businesses prefer to use weak trademarks because a descriptive mark provides information about the product to the con-sumer. For example, consumers know immediately that Food Fair is the name for a supermarket and Raisin Bran is the name for a cereal made with raisins and bran. A weak mark can acquire distinctiveness if, through extensive sales and advertising, the public becomes aware of the mark and associates it with a particular source.
In Chapter 3, the section “What Makes a Distinctive Trademark a Legally Strong Trademark?” revisits in more detail the subject of what makes an effective trademark. The question of what makes one mark strong and another mark weak often is the key to resolving trademark disputes and frequently must be understood to handle your own trademark issues.
Ownership of a Trademark: The First-to-Use Rule
In the United States, the first business to use a trademark owns it.
Two Types of First Use
There are two ways to qualify as a first user of a trademark:
actual use—being the first to use the trademark on a product that is distributed in the marketplace or, in the case of a service mark, the first to use the mark in connection with advertising or marketing of a service available to the public, or
intent to use—being the first to file an intent-to-use application with the U.S. Patent and Trademark Office provided that (1) the applicant files the application before the trademark is actually used by another party and (2) the applicant later puts the mark into actual use and completes the registration process by filing an additional form and paying an additional fee.
Example 1: In 2008, Jonah begins publication of Geezer Tennis, a magazine for aging tennis players. In the year 2011, a business competitor sends Jonah a letter stating that Jonah is infringing its federally registered trademark Geezer Games. Jonah does a little investigating and learns that Geezer Games was first used as a mark in 2009, a full year after Jonah started using the mark. Jonah would be considered the owner of the Geezer mark and could in fact require Geezer Games to change its name, because the products of the two businesses compete and would therefore likely lead to customer confusion.
Example 2: Assume now that in 2010, Geezer Games had applied for federal trademark registration on an intent-to-use basis, even though it hadn’t actually put the mark in use commercially until 2011. If Jonah started actual use of the Geezer mark in March 2010, and Geezer Games filed its application for registration in April 2010, Jonah would still be considered the owner. However, if the application filing date preceded Jonah’s actual use, Geezer Games would be the ultimate owner, once it put the mark into actual use.
What constitutes actual use and intended use is discussed in detail in Chapter 7, “Federal Trademark Registration.”
Two Different Businesses Can Own the Same Mark
It is possible for a mark to be “owned” by two or more separate businesses as long as no customer confusion is likely to result. If the underlying products or services of two businesses are quite different and don’t compete, then customer confusion is unlikely. Similarly, if the underlying products or services are distributed and marketed in different channels or parts of the country, then again there is little likelihood of customer confusion. For example, one U.S. district court ruled that the mark Aisle Say used for theater reviews could be owned by two different entities—one that published its reviews exclusively on the Internet and the other that published its reviews in print in the New York metropolitan area (Albert v. Spencer, 1998 U.S. Dist. LEXIS 12700 (S.D. N.Y. 1998).) But, as we pointed out earlier, the more famous or distinctive a mark is, the more likely it is that customer confusion will result (and the less likely it is there will be more than one owner).
When Dual Users Come Into Conflict
What happens if a mark is owned by more than one business because of different geographical markets, and one of the businesses decides to move into the other business’s territory? Or suppose that dual ownership has been possible because one business used the mark on sportswear and another on lawn mowers, and both businesses decide to move into gardening clothes? In these situations, some rules kick in that help a court decide the respective rights of the owners. The rules revolve around such questions as:
Did the second business to actually use the mark know of the first business’s previous use?
Is the first user’s mark federally registered and, if so, did the second use begin before or after the registration?
Is the second user’s mark federally registered?
How broad were the first user’s marketing efforts when the second use began?
(Chapter 10, “Sorting Out Trademark Disputes,” deals with all these issues and tells you how the courts are likely to resolve them in specific fact situations.)
The internet may render dual ownership obsolete. As businesses use the Internet to market their goods and services, it will be harder and harder for two marks to coexist, since they will be sharing the same marketing channel, which happens to be national and even international. The risk of confusing customers who are using the Web to shop will be high. (Customer confusion is discussed in more detail in Chapters 6 and 10.)
The Role of Customer Confusion in Trademark Law
As mentioned in the Introduction, virtually all trademark disputes that make it to court are resolved on the basis of the answer to this one simple question: Is simultaneous use of the marks likely to cause customer confusion? If there is no customer confusion, then the courts see no reason to intervene. (An exception to the customer confusion rule is sometimes made for famous marks, which, by law, are entitled to be free from other uses that would dilute their strength or tarnish their reputation for quality. See below for more on dilution.)
It’s important to understand that two different marks can be confusingly similar for a number of reasons. Take, for example, the well-known mark Microsoft. Could a business avoid the likelihood of customer confusion by using a name that sounds the same as Microsoft but looks different, such as Mikkrowsought or Mike Crow Soft? Or that looks the same but sounds different, such as Macrosoft? Or that looks and sounds different but which means essentially the same thing, such as TinySoft? Or perhaps a fanciful arrangement of the words and letters, such as
The answer to all these questions is no. Why? A mark that is similar to another only in sound, appearance, or meaning is still similar and therefore likely to confuse potential customers. However, the weaker the original mark is, the less concerned the courts will be about possible customer confusion and the more acceptable changes in appearance, sound, or meaning will be as a way to distinguish one ordinary mark from another.
Even if two marks are exactly the same, customer confusion will not be likely and infringement won’t occur if the goods or services identified by the marks aren’t related in some way. For instance, Delta Faucet and Delta Airlines can both use the Delta mark because customers just aren’t likely to confuse one with the other. But clothing and items that are both sold in sporting goods stores may be considered related products—because they are marketed in the same channel—and therefore customer confusion could be found to result.
(Chapter 6, “How to Evaluate the Results of Your Trademark Search,” provides an explanation of what standards are used to measure customer confusion.)
Special Treatment for Famous Marks: The Dilution Doctrine
In 1995, Congress passed the Federal Trademark Dilution Act (FTDA), a statute that gives the owners of certain famous marks protection against copycats even if there is no likelihood of customer confusion. This protection only applies if dilution of the famous mark’s distinctive quality is shown. The act defines dilution as “the lessening of the capacity of a famous mark to identify and distinguish goods or services.” Courts have extended this definition to include two factors:
blurring of the famous mark (which means detracting from the mark’s uniqueness), and
tarnishment (which means negatively affecting the famous mark’s reputation for quality).
In 2006, Congress enacted the Trademark Dilution Revision Act of 2006 which eliminated the need to demonstrate actual or likely confusion, competition, or actual economic injury when the owner of a famous mark seeks to stop dilution of a mark. The act also provided definitions for “famous,” “blurring,” and “tarnishment,” and it carved out exceptions for activities such as parody and commentary. We provide more detail on the 2006 act in Chapter 10.
In addition to the FTDA, which has national application, about half of the states have their own dilution statutes that differ to a greater or lesser degree in how they define dilution. The main point you need to be aware of here is that famous marks may be protected against use by others even if consumers are not likely to be confused by the dual use. We explain dilution in more detail in Chapter 10.
How Trademark Law Protects Trademarks
The trademark system is self-policing. If you don’t do anything about your business name or other mark getting ripped off by a competitor, no one else will. And so, even though the law provides “protections,” you will have to step forward and use what tools the law provides.
As a general rule, these tools are very limited. In some situations it is possible to resolve a dispute by filing an administrative petition or complaint with the PTO (see Chapter 7, “Federal Trademark Registration”), but the vast majority of trademark disputes that can’t be settled by negotiations are resolved by filing a federal court lawsuit claiming trademark infringement or, in the case of a dispute between a mark and a domain name, by a federal lawsuit or an administrative arbitration.
Typically, an infringement lawsuit asks the court to immediately order a suspected infringer to stop using the mark in question and to award the business bringing the suit monetary damages for harm caused by the infringer. Once the judge rules on the request for immediate relief, the case is then typically settled. If the court grants the immediate relief requested by the plaintiff, the case usually is settled on terms favorable to the plaintiff. If the judge denies the relief, the defendant usually fares better. Few trademark cases make it all the way to trial and, consequently, few cases result in damage awards, although large amounts of money may change hands as part of the settlement.
Litigation can get expensive in a hurry, easily running into tens of thousands of dollars in legal fees. The cost of litigation teaches one very important lesson when it comes to trademark disputes: Be flexible and don’t get carried away by the right or wrong of the situation. Always treat the issue as a business decision—try to resolve it in the manner that will most benefit (and least harm) your business. Remember that negotiation is an option, and there are many ways to structure a settlement. Using a cease and desist letter if the law is on your side is a first step. (How to handle trademark disputes is covered in more detail in Chapters 11, “If Someone Infringes Your Mark,” and 12, “If Someone Claims that You Infringed a Trademark.”)
The Role of Federal Registration in Protecting Trademarks
Trademarks can be registered with the PTO under a federal statute known as the Lanham Act. Trademarks are commonly registered with the PTO using one of two methods:
The trademark owner files an application based upon use of the mark in commerce regulated by the federal government.
The trademark owner files an application based on an intent to use the mark in commerce regulated by the federal government and subsequently uses it (known as an intent-to-use or ITU application).
In Chapter 7, “Federal Trademark Registration,” we tell you how to get the job done of registrations of business and product names.
Registration can increase a trademark owner’s ability to win a lawsuit based on infringement of the registered mark and provide additional benefits as discussed below. Although registration increases protection, it’s important to understand that in many cases it is possible for the owner of an unregistered trademark to stop someone from using a confusingly similar trademark. That’s because, with the exception of ITU applications (discussed in Chapter 7, “Federal Trademark Registration”), trademark rights are held by the party who first uses the mark in commerce, not who first files an application for registration with the PTO. In federal court, a holder of a registered trademark is presumed to own the mark, but this can be rebutted with proof of earlier use of the mark. Thus, registration provides a trademark user with the presumption of ownership, but not actual ownership, of the mark.
The Principal Register
The PTO keeps two lists of all trademarks that it has decided to register —the Principal Register and the Supplemental Register. In addition to the trademarks themselves, these registers include the following information:
the owners of the marks
the dates the marks were registered
the types of goods or services identified by the marks, and
other potentially useful information, such as how the marks were described by their owners in the application process.
Of the two lists, the Principal Register is by far the more important. Placement on this list provides a trademark with the protection that makes it worthwhile to register the mark in the first place.
Qualifying for Placement on the Principal Register
To be placed on the Principal Register:
The mark must be in actual use in commerce involving two or more states or across territorial or international borders. Even if an application has been filed for registration based on intended use, the mark will not be registered until it is put into actual use.
The mark must be sufficiently distinctive (inherently or acquired through use over time) to reasonably operate as a product or service identifier in the marketplace.
The mark may not be confusingly similar to an existing mark in a context where the confusion of customers would be likely.
The mark may not fit within one of the categories that Congress has deemed to be off limits for trademarks (such as using “U.S.” or the name of a living person without his or her consent).
The mark may not consist primarily of a surname or a geographical name (unless the mark has become well known over time or the geographical term is clearly arbitrary but not deceptive).
The mark may not consist of the title of a book, play, recording, or movie that is a single-issue artistic work (as opposed to a series or serial) unless the title has become well known over time.
Benefits of Registration on the Principal Register
Registration on the Principal Register provides these protective benefits:
exclusive nationwide ownership of the mark (except where the mark is already being used by prior users who may not have registered the mark)
official notice to all would-be later users that the mark is unavailable
the right to put an ® after the mark, which also puts users on notice that the mark has been registered
the right to immunize the mark from certain challenges if the mark is kept in continuous use for five years after the registration date, and
a legal presumption that the registrant is the owner of the mark (which means the registrant won’t have to prove ownership if a dispute over the mark ends up in court, although, as noted, the registrant may have to show prior use to rebut a contender’s claim of ownership based on first use).
Taken together, these benefits make it easier to win an infringement lawsuit and make it more likely that large damages can be collected for the infringement (which means there will be money to pay the attorneys and make it worthwhile to bring the lawsuit in the first place). (See Chapters 10 through 12 for more on infringement lawsuits.)
The Supplemental Register
The Supplemental Register is an option for marks that aren’t distinctive enough to qualify for placement on the Principal Register. This lack of distinctiveness means that the courts are unlikely to give the mark much protection in the event of a lawsuit.
As a general rule, placement of a mark on the Supplemental Register does not help much if a dispute over the mark ends up in court. However, anyone doing a standard trademark search to find out whether the same or a similar mark is available for their use will discover the registration and most likely will decide to choose another mark, just to be safe. Also, placement on the Supplemental Register entitles the mark’s owner to use the ® that, to the public, signifies a registered trademark. And finally, if the mark continues in use and remains on the Supplemental Register for five years, it is easier to apply to have the mark placed on the Principal Register (because it has acquired distinctiveness through continued use over time). The bottom line is that the Supplemental Register provides some practical benefits and therefore provides a sensible alternative if placement on the Principal Register is denied because of the mark’s lack of distinctiveness.
State Trademark Registers
All states maintain separate trademark registers. The main function of these is to provide notice to would-be later users that a mark is already in use in a state. Unlike federal trademark registration, placement of a mark on most state registers confers few benefits other than an indication of when trademark rights in the mark were first claimed by the registrant. Because of the relative unimportance of state trademark registrations, we don’t devote the space to explaining how to handle them. However, if you want more information on your state’s trademark registration procedure and trademark laws, contact your state trademark registration office. You can also obtain more state trademark information at either Marksonline (www.marksonline.com) or the All About Trademarks website (www.ggmark.com).
Not All Business Names Are Trademarks
The most common method adopted by a new business to identify itself in the marketplace is its name. For the purposes of trademark law, there are two main types of business names:
the formal name of a business, called its trade name, and
the name the business uses to market its products or services, alternatively referred to as a “trademark,” “service mark,” or just plain “mark.”
For most small businesses, this is a distinction without a difference. Almost all legal problems involving business names arise when a business name is used as a trademark—that is, used to build a customer base for the business—and not when the name is used as a trade name simply for billing, banking, and tax purposes.
The distinction between a trade name and a trademark can be a little confusing at first, because many businesses use at least a part of their trade name as the name they use to market their goods or services. For instance, every time a small business named something like Pete’s Graphic Designs, Elmwood Copymat, or Good Taste Organic Foods puts its name on a store sign, window display, or brochure, it is using its trade name as a trademark. On the other hand, large businesses often use different names for each type of subsidiary activity. For instance, Ford Motor Company puts its name on its cars but also uses a subsidiary mark for each type of car (for instance, Escort, Probe, and Thunderbird) and a different mark entirely for its auto parts division (Motorcraft).
Corporate and Fictitious Names
A corporate name is simply the name of a corporation as registered at the time of incorporation. It must generally be approved by a state official, such as the secretary of state or corporations commissioner (the names vary from state to state), and followed by a corporate identifier, such as Inc. or Corp., as in Time, Inc., or Sony Corp. A corporate name is a trade name in that it identifies the corporation and not necessarily any product or service the corporation offers.
Another form of trade name is the fictitious business name, which is any assumed business name or alias. When a person or partnership does business under a name not its own (and this also applies to a corporation doing business under a name other than its corporate name), that person (or partnership) must usually file a fictitious business name statement with the county or state. For example, Laura Smiley uses a fictitious business name when she conducts her sole proprietorship business as Le Petite Cafe or Laura’s Bookkeeping, but not if she operates under the name of Laura Smiley Enterprises. Similarly, if the partnership of Renauer, Randolph and Ihara operates the Reader’s Corner Bookshop, it is using a fictitious business name.
Trade Name Formalities
Almost all businesses are required to register their business names with a local or state agency charged with keeping track of business names. What agency this is usually depends on whether a business is a corporate entity or a sole proprietorship. Here we provide an overview of the steps you’ll likely have to take to get your particular business name registered with the appropriate agency.
Trade Name Registration Requirements
All names that identify business entities—corporate names; fictitious business names; assumed names; partnership names; the names of nonprofit, charitable, religious, and educational institutions; and the names of sole proprietorships—are trade names. With a few exceptions, every business is required by state law to take certain legal steps to list its trade name with a public agency. These vary somewhat depending on the form of the business—for instance, corporations must follow a different procedure than partnerships. Corporations usually must register with their state’s secretary of state or corporation commissioner’s office. Unincorporated businesses must usually register with an agency that keeps track of fictitious or assumed names.
In addition to providing a registry where members of the public can check on a business ownership, these name registration procedures are designed to screen out the use of identical or very similar names within the state or county where the business is based. However, as we will see, they don’t do a perfect job in accomplishing this. Rather than describe the specific requirements of all 50 states, we will explain generally the requirements for most of the states and give you enough information to easily find out the rest on your own.
Corporate Name Registration
Corporations are creatures of state law. By a legal fiction, they are considered persons—artificial persons. When they are created, we say they are incorporated (literally translated, given a body).
This process involves filing articles of incorporation, paying a fee (and possibly an advance on corporate taxes), picking a board of directors, and, most important for our purposes, registering the corporate name with the secretary of state, state department of corporations, or corporations commissioner. Each state’s laws on this are a little different. Registering a corporate name involves three steps.
Check Your Secretary of State’s Website
Most corporate name registration agencies maintain websites on the Internet. A few states offer the opportunity to conduct your corporate name registration activities online and this is expected to increase, so make sure and check to see what services your state corporate name registration agency offers. You can find a listing of the website for each state’s business name filing registry at www.business.gov/register.
Step 1. Select a permissible name.
All but three states (Maine, Nevada, and Wyoming) require you to include a word or its abbreviation indicating corporate status, like “corporation,” “incorporated,” “company,” or “limited.” Several states also require that the name be in English or Roman characters. In addition, most states forbid including in your corporate name words that imply a purpose different from the one stated in the articles of incorporation or that mislead or deceive the public. For example, if you are forming a corporation that will help people fill out their medical insurance forms, you probably shouldn’t call it Oil Drillers, Inc.
Step 2. Clear your name.
Next, you will need to make sure that your corporate name is distin-guish-able from every corporate name already registered in your state. The reason is simple: Your state won’t register a corporate name that too closely mimics a name already on file. To ease your task, the secretary of state or other corporate filing agency will do a search for you prior to authorizing the use of your name. In about half the states, you may phone to check on the availability of a name in advance. In the others, you must write to request a search. Often you may request a search of more than one name at a time. A corporation that is fairly confident that its name is unique may simply submit its articles of incorporation without a search and risk rejection if the name is already taken.
Generally, the state agency will compare your name with registered and reserved names of other corporations incorporated in your state and with those incorporated elsewhere that have registered to do business in your state. How thorough the search is varies from state to state; each state’s rules vary on how different your name must be from an existing name. In every state, however, if your name is found to be confusingly or deceptively similar to another name, you will have to change it so that it is distinguishable from the existing name. This is true even if the two corporations are in very different fields—unless the owner of the registered name gives written permission to use the similar name proposed for registration.
Step 3. Reserve your corporate name.
A corporation can usually reserve a name prior to actual incorporation if the name otherwise qualifies for registration. This freezes out other would-be registrants of that name (or one deceptively similar) during the period of reservation, usually 60 to 120 days. Most, but not all, states permit you to extend the reservation for one or more additional periods for additional fees. Also, some states allow corporations to register their names without doing business in the state and even to renew those name registrations annually, which provides the equivalent of long-term name reservations for out-of-state corporations. Check with the secretary of state to discover more about these options if you wish to use them.
Registering your corporate name with a state agency may give you far fewer legal rights than you think it does. As discussed below, it does not necessarily give you the legal right to use that name to identify your products or services, only to identify the corporation.
Fictitious Business Name or Assumed Name Registration
In all states, any person who uses a trade name other than his or her surname, and any organization that goes by a name other than the last names of the owners, must register the name with the state or county as a fictitious or assumed name.
This process, which is analogous to a corporate filing with the state, usually means paying a fee and filing with the county clerk a certificate that states who is doing business under that trade name. Many states also require a business owner to publish a statement, often called a DBA (doing business as), several times in a local newspaper. Such a statement allows creditors to find the people behind the business.
Not every type of business must file a fictitious business name—it varies with the state. In almost all states, fictitious business name laws apply principally to individuals (sole proprietorships) and general partnerships. Because corporations have their own regulations, fictitious business name laws do not apply to corporations, except in the fairly rare situation in which a corporation does business under a name different from its corporate name. In most states, fictitious business name laws also do not apply to limited partnerships because other laws govern their registration. In some states, the law also covers nonprofit organizations and corporations, including churches, labor unions, hospitals, and so on.
Contrary to the effect of registering a corporate name, registration of an assumed or fictitious business name does not necessarily prevent others from registering the same name. Because many states do not maintain a central register of fictitious business names, few states “clear” a fictitious business name by checking it against any other lists before registering it. As a result, several businesses might use the same trade name in the same state.
This means that if your state has no central fictitious name register, the only way to be sure that no one else in your state is using the name as a trade name is to check any proposed fictitious business name against the records of every county, not just your own. But, as we discuss below, whether someone else is using the same trade name as yours is of less practical importance than if they are using the same trademark or using the same trade name as a trademark as well. For this reason, we aren’t suggesting you check every county list if all you are concerned about is use of a trade name.
The Legal Relationship Between Trade Names and Trademarks
As mentioned, people often think that once they have complied with all the registration requirements for their trade names, they have the right to use them for all purposes. Because this point is so important, let us again emphasize that this isn’t so. As we have seen, there are two very different contexts in which a business’s name may be used:
the formal name of the business for purposes of bank accounts, creditors, and potential lawsuits (trade name)
the name that the business uses to market its goods or services (trademark or service mark).
The registration requirements address the first context only. They don’t address the second. That is, Backyard Fantasies, Inc., may be properly registered as a corporate or fictitious business name (trade name) but, because of the previous use of that name by someone else as a trademark, be legally unusable as the name the business puts on its signs, displays, advertising, and products (trademarks, service marks).
A trade name acts like a trademark when it is used in such a way that it creates a separate commercial impression or, put more directly, when it acts to identify a product or service. This can sometimes be a tricky determination, especially comparing trade names and service marks, because they often both appear in similar places—on letterheads, advertising copy, signs, and displays. But some general principles apply:
If the trade name is used with its full name, address, and phone number, it’s probably a trade name. For instance, consider “The Goodnight Meat Company.” It appears with an address, and the eye scans it, registering it as information only. This impression is intensified if an obvious trademark that also belongs to the company (“Sunrise Sausage”) is used alongside it. Sunrise Sausage serves as the identifier of goods, while the Goodnight Meat Company only identifies the company.
If a shortened version of the trade name is used (for instance, “Goodnight Meats”), especially with a design or logo beside or incorporating it, the trade name becomes a mark. Large companies, such as Consolidated Agriculture, often use a shortened version of their trade names (for instance, ConAgra) alongside marks for specific goods that they produce, including Swift Meats, Hunt-Wesson Oils, Peter Pan Peanut Butter, and Banquet Frozen Dinners. Used this way, the name ConAgra acts like a mark because it has a design surrounding it, and it is sufficiently different from the full corporate name, which is Consolidated Agriculture.
Simply put, if the name you have registered as a corporate or fictitious business name was already in use or federally registered as a trademark or service mark, you will have to limit your use of the corporate name to your checkbook and bank account. The minute you try to use the name in connection with marketing your goods or services, you risk infringing the existing trademark or service mark. (See Chapter 10 for more on infringement.) If your corporate name figures in your future marketing plans, you must search for use of the name as a trademark in addition to complying with the corporate name registration requirements. If you plan to market your goods or services on the Internet, then you’ll also want to check to see whether your proposed name has already been taken as someone else’s domain name, which would mean, at the least, that you’d have to use a slightly modified name (because every domain name is unique). (See Chapter 2, “Trademarks, Domain Names, and the Internet,” for more about domain names.)
Trade Dress and Product Designs
Trade dress refers to the total image of a product or service created with a combination of such features as size, shape, color or color combi-nations, texture, graphics, or even particular sales techniques. Product design, a subcategory of trade dress, refers to the shape and appearance of a product, for example, the appearance of a line of clothing or furniture.
To the extent that the decor of a business, the packaging of a product, or the shape of a product are distinctive and intended to operate as marks, these indicia will be treated as marks and can even be registered as marks with the PTO. Visitors to a Hard Rock Cafe can identify various features that distinguish this chain of restaurants from competitors. In a liquor store, you can distinguish the bottles of Absolut vodka from those of its competitors. Most everyone can tell the difference between Kodak (yellow) and Fuji (green) film containers. Because each of these devices signals to customers that the product or service originates from a particular source, they are all examples of trade dress that qualify for trademark protection.
Basic legal principles that apply to trade dress are presented below and may be helpful, particularly in relation to the use of product and service names with trade dress elements.
Whether or not a particular trade dress qualifies for protection as a trade-mark depends on several basic factors. First, is the trade dress distinctive?
Some types of trade dress may be considered distinctive simply on the basis of the trade dress itself (inherent distinctiveness). For example, the U.S. Supreme Court found that a Mexican restaurant chain’s decor could be considered inherently distinctive because, in addition to murals and brightly colored pottery, the chain also used a specific indoor and outdoor decor based upon neon-colored border stripes (primarily pink), distinctive outdoor umbrellas, and a novel buffet style of service. (Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992).) However, product designs such as the appearance of a line of children’s clothing are not considered to be inherently distinctive and can only be protected if they acquire distinctiveness through sales or advertising. (Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 120 S.Ct. 1339 (2000). See sidebar below, “Wal-Mart v. Samara: The Supreme Court Makes It Difficult to Protect Product Designs.”) And speaking of trade dress (with the emphasis on the “dress” or lack of it), in 2009, the Trademark Trial and Appeals Board refused to register the cuffs and collar design mark used by Chippendale’s exotic male dancers, finding that it was not inherently distinctive trade dress. (In re Chippendales USA, Inc., 90 USPQ2d 1535 (TTAB 2009).)
Acquired Distinctiveness (Secondary Meaning Rule)
Secondary meaning is a demonstration that the consuming public associates a mark with a single source, usually proved by advertising, promotion, and sales. If the trade dress is not inherently distinctive, distinctiveness can, with exceptions, still be acquired through extensive sales and advertising. A red star may not be inherently distinctive, but when it is used extensively in advertising for gasoline sales and automotive services (“Look For the Big Red Star”) then it may have acquired secondary meaning.
Some types of trade dress—such as a single color or a product design—may never be considered inherently distinctive because customers would have no way of associating the trade dress with the underlying products or services, or their source, without becoming familiar with them over time. For example, the use of a single color could not be inherently distinctive because consumers would not immediately associate a color with one product or company. In that case, the color sought to be protected must have acquired distinctiveness under the secondary meaning rule.
Trade Dress Can Be Registered With the PTO
As a general matter, distinctive trade dress can be registered with the PTO and will receive extra protection as a result. However, as with trademarks generally, distinctive trade dress also qualifies for protection against copying even if it’s not registered.
Likelihood of Confusion Is Required
As with other types of trademarks, infringement of trade dress occurs only when there is a likelihood of customer confusion between the underlying goods or services, or their origins. Even when two different trade dress packages are similar in appearance, if customers have an easy way to tell one product or service from another, the courts have been reluctant to find that infringement has occurred. For example, a federal court found that there was no trade dress infringement in the case of two skin care products with similar lettering, colors, and graphic design. The court determined that the prominent use of each company’s name on its own product would prevent consumers from being confused by the similar trade dress.
Functional Trade Dress Is Not Protected as a Trademark
The trade dress feature for which you seek protection cannot have a functional purpose other than to distinguish the product or service in the marketplace. This may seem confusing, because all trade dress features have at least some utilitarian function. For instance, packaging protects products against wear and tear, and a uniquely shaped bottle holds the bottle’s contents. But if the design elements are not essential for the underlying product’s purpose (for instance the curved shape of an Absolut or a Coca-Cola bottle isn’t a necessary part of the product), then the trade dress is considered nonfunctional in a legal sense. On the other hand, the blue dot on Sylvania flashcubes was considered too functional to qualify for separate trademark status, because it served the utilitarian purpose of indicating when a bulb was used (when the blue dot turns black). Some examples of products that may have nonfunctional design features are furniture, automobiles, sweaters, and notebooks. If the design features of any of these items become well established as means of identifying their sources, and are nonfunctional, they may qualify as protectible trade dress.
Wal-Mart v. Samara: The Supreme Court Makes It Difficult to Protect Product Designs
In Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 120 S.Ct. 1339, 146 L.Ed. 2d 182 (2000), the Supreme Court ruled that product designs, like colors, are not inherently distinctive. Samara created a line of children’s clothing that featured one-piece seersucker outfits decorated with appliques of hearts, flowers, and fruits. Wal-Mart asked another clothing company to copy Samara’s designs and then sold the knock-offs at a lower price. Samara brought a federal lawsuit against