This article contains fictional scenarios that include facts and legal issues that are created for an explanatory purpose. Any of those facts and legal issues including legal conclusions may not be true when applied to your case. Please seek a legal advice or counsel if you need any help.
In past articles, we discussed how to name your products and register the names with respect to a trademark protection.
To briefly summarize, we discussed the followings.
1. Most of all, you need a good name for a trademark.
- Avoid any name that is similar to competitor’s.
- Do not use a generic name that is commonly used in the industry.
- If possible, you try minting a term that describes your product.
2. If you anticipate a possible trademark infringement, registration is a must.
- Search the internet using internet search engines like Google for any taken names out there.
- You can also use USPTO’s Trademark Electronic Application System to register your trademark by yourself.
- Don’t forget to pay maintenance fees once every 10 years.
Let’s see how it works out in the business environment.
1. Antique Metal Zig-zag Hair Band
Mike has been in the beauty supply industry for 15 years. He experienced sales and retail management to a good extent, so he is good at forecasting consumer trends and popularity of new items.
He realized at some point that zig-zag hair band is a next it-item for 2018. He did some research and found out zig-zag hair bands available in the market are mostly made of plastic. Based on this, he came up with a premium zig-zag hair band with oil-rubbed bronze finish.
He had a Chinese supplier mass-produce the product and has been receiving increasing number of orders for the product, which he named “Antique Metal Zig-zag Hair Band”. It is about to become a huge success, and then he finds out a wholesale is selling “Antiquity” Metal Zig-zag Hair Band, replacing Antique with Antiquity, with basically an identical product as they are produced in the same manufacturing line.
Q: How expensive would a lawsuit be?
A: It will be decided by hours. In certain areas of the law, attorneys offer a legal service for a contingency fee, but trademark infringement is not one of those special circumstances. The legal bill will be largely dependent upon the hours your attorney spends for a lawsuit including following up court proceedings, negotiate with your opponents, and so on.
Q: How long does it take to get an injunction?
A: This is a non-registered trademark, so you will first prove that you own the trademark. This involves whether the opponent have used the trademark prior to your use, among other things. Later on, it will ultimately come to a finding of likelihood of confusion among consumers regarding two trademarks. Another difficulty in this situation is that you cannot claim an exclusive use of the “Metal Zig-zag Hair Band”. Even an exclusive use of “antique” can be contested at court. As there are many legal issues, legal actions may cost you more than thousands of dollars.
Q: How likely we prevail?
A: The knockoff at issue has not only a similar name but also an identical packaging, color, style, and so on. As long as we can prove that we have priority (e.g. we used it first), we will likely prevail.
2. Bear Tooth Hair Band
Mr. Lee has entered the field of beauty supply at his late career, but his previous job at a retail service company made him aware of the importance of trademark.
Just like Mr. Kim, he also foresaw a zig-zag hair band trend this fall and had “Bear Tooth” trademark registered with the USPTO via an Intend-To-Use Application. He thought the crooked shape of bear tooth would suggest a zig-zag shape of a hair band. He had no idea what material to be used, but later he noticed that Antique’s oil-rubbed bronze finish products are received very fairly in the retailers. He placed an order from a Chinese supplier.
The product was only launched in July, but in a few months, customers started looking for “bear tooth hair band” since the name was very catchy. Not long after, people started to call any zig-zag hair band made of metal “bear tooth”. In turn, many retail stores are displaying and selling Antique and Antiquity products as if they are all Bear Tooth Hair Bands.
Q: What can be done legally?
A: Bear Tooth is a registered trademark of Mr. Lee, so any use of the name to sell a similar product is unlawful. You can send letters asking for cooperation, and if a retail store continues to use the trademark illegally, then you can bring a lawsuit.
Q: What would be a legal cost for lawsuit?
A: In this case, the trademark is registered with the USPTO, and the infringement is clear and obvious. More than likely, the retailers will cooperate upon receiving letters. Therefore, the cost would be attorney’s fee for drafting a cease and desist letter plus administrative cost including postage and handling, which could run a few hundreds of dollars.
Q: What about similar names like Black Bear Tooth? What can be done?
A: Thanks to the ITU Application, the trademark is registered with the USPTO by now. There is no need to prove priority as it is given by the fact that the trademark is registered. You can just let retailers know of the registration and proceed with other legal measures such as injunction prohibiting import. After the acknowledge of registration, any profit made through illegal use of your trademark becomes recoverable upon trademark infringement lawsuit. There is very little incentive to continue illegal use of a trademark for retailers and distributions alike.
What about the retail store owner’s liability?
Q: Can a retail store advertise and sell another product as Bear Tooth Hair Band?
A: Of course not. It is a trademark infringement. Bear Tooth is a registered trademark of Mr. Lee. He has an exclusive right to commercially use the name. Technically, no one can use Bear Tooth mark on a hair band packaging, retail display, brochures, advertisements without Mr. Lee’s consent. Of course, you can use the mark in association with the original Bear Tooth Hair Band. However, you may not place another product in a section you marked with Bear Tooth mark. This would lead your customers to believe any product in the section is Bear Tooth products, which results in a trademark infringement. Not only civil liability but also criminal penalties can be imposed based on the intent of using the mark.
Q: If I had no idea about the trademark infringement, am I okay?
A: There is no intent requirement for trademark infringement. On the other hand, you may be subject to a lesser punishment if you did not know about it. Often, trademark owners will send letters to retail stores regarding a trademark infringement. If the retail owners keep infringing trademark after receiving the letters, they cannot later argue that they did not know. Knowingly violating other’s trademark rights will make you liable for all loss of profit for the trademark owner plus other damages.
Q: How do you know what is a trademark of others?
A: Registered trademark owners can use ® mark to notify the public of their rights. Even if not registered, TM is available for marking any trademark. Beware that because TM mark does not require registration, it can be abused for marking non-trademarks as trademarks.
Let’s compare the two scenarios.
|Antique Metal Zig-zag||Bear Tooth|
|Trademark||“Antique” and “metal” is generic terms for the material and design. Weak trademark rights||“Bear Tooth” is a unique, suggestive term for the product. TM rights immediately available|
|USPTO Registration||None Need to prove your rights||Intent-to-use Application ITU provides priority|
|Similarity of Marks||Antiquity Metal Zig-zag is very similar to Antique Metal Zig-zag Other factors like color, font, and design are considered.||Black Bear Tooth is just a black Bear Tooth. Obvious infringement|
|Legal Action||Unlikely to succeed without a substantial time and money||Affordable options available: letters, reporting to law enforcement, etc.|
When a product becomes a success, it is rather expected that similar products start to crowd the market. Nonetheless, it is forbidden by the law that second comers to deceive consumers with a confusingly similar mark or product package.
As we saw in the above Bear Tooth scenario, a good planning of trademark protection often helps more efficiently dealing with any infringement activities.