Trademark Law - An Overview Of Tradeamrk Law.

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Source:
http://www.michaelandmindy.net/michael/consumers/gripesite3.htm
This is an excerpted article. Most of it is reproduced.

AN OVERVIEW OF TRADEMARK LAW
A trademark is a distinctive picture or word that a seller adds to a product to identify its origin and to distinguish the product from other products. Trademark law grants protection to many forms of identification, including:
• Invented words such as Kodak and Exxon
• Distinctive and unique packaging such as the Heinz Ketchup glass bottle
• Unique color combinations (yellow and red for Kodak film)
• Building designs (McDonald's golden arches)
• Unique logos or symbols (the IBM symbol or the red K used by Kellogg's)
In 1946, Congress passed the Lanham Act[4] (the Act) to regulate trademarks. Congress enacted the Act under its constitutional right to regulate interstate commerce.[5] A trademark registered under the Act is given federal protection. Parties may register actual or planned trademarks with the Patent and Trademark Office. If examiners initially approve a trademark, it is published in the Official Gazette of the Trademark Office. This is done to notify other parties pending final approval. A full set of legal options is available to resolve trademark disputes.
The Act also discusses certain marks that may not be legally registered as trademarks. They include
• Generic or geographic product names. (As an example, "Maine Potatoes" cannot be registered as a trademark by any one person. The phrase does not distinguish one person's product, but describes all potatoes grown in Maine. "Johnson's Maine Potatoes" could be registered as a trademark.)
• The name, portrait, or signature of a living person without his or her consent
• State or municipal flags.[6]
Although the owner of a trademark is guaranteed "exclusive use" of the trademark, that right has certain limitations. These limitations are known as fair use and allow others to use the trademark as a descriptive term. The fair use doctrine allowed the use of Bally's trademark as an exhibit in this article. If I wanted to sell my 1985 Chevrolet Celebrity, I could advertise that it is a Chevrolet Celebrity although I did not get permission from General Motors to use the name. A competitor may use another person's registered trademark in a comparison of goods. For example, an ad for Coca-Cola can say that it tastes better than Pepsi Cola, although Pepsi did not authorize the use of its trademark.
People and organizations rely on trademarks to make intelligent decisions about product purchases. According to the Act, infringement has occurred when use of the trademark by another party is "likely to cause confusion, or cause mistakes, or to deceive."[7] The court may issue injunctions, compensate the owner for damages, take away profits from the infringer or award attorney fees.[8] The court may even confiscate and destroy goods with the illegal trademark (a frequent occurrence used again illegal vendors at rock concerts).
The owner of a trademark has the exclusive right to use it on its product and on related products, such as T-shirts and lunchboxes. A recognized and respected trademark can be one of an organization's most valuable assets and often has cash value when the company is sold or liquidated.
Trademark dilution takes place when the unauthorized use of a trademark would reduce its value to the owner. Dilution must be commercial in nature and can occur even when there is no direct business competition between the parties.[9] In one recent case,[10] American Express, the worldwide credit card organization, sued the American Express Limousine Service after the limousine service used the same name. Even though there was no competition between the two companies (credit cards and limousine service), the court found that the "defendant's use of the AMERICAN EXPRESS mark would 'whittle away' the distinct quality of plaintiff's mark."
ANALYSIS: TRADEMARK INFRINGEMENT
Bally claimed that Faber's Web site constituted both trademark infringement and trademark dilution. By granting summary judgment, the court held that Faber's actions were not a violation of trademark law, even if all of the charges claimed by Bally were true. According to the Act, the court would have to find that Faber's use of the Bally trademark created a likelihood of confusion.[11] Only then could the court find that trademark infringement had occurred.
A major factor in determining whether there is a likelihood of confusion is the similarity of goods produced by the two parties.[12] The more related the goods are, the more likely it is that the court will find that trademark infringement actually took place. "Related goods are those goods which, though not identical, are related in the minds of consumers."[13] Courts have considered the following pairs of items to be related goods:
• Shirts and pants[14]
• Beer and whiskey[15]
• Locks and flashlights[16]
Bally and Faber did not market similar goods (health club memberships as opposed to Web page design) so there was little likelihood of confusion through related goods. The court then held that:
No reasonable consumer comparing Bally's official website with Faber's site would assume Faber's site 'to come from the same source or thought to be affiliated with, connected with, or sponsored by, the trademark owner.' Therefore, Bally's claim for trademark infringement fails as a matter of law.[17]
ANALYSIS: TRADEMARK DILUTION
The court also granted Faber's motion for summary judgment against Bally's claim of trademark dilution. To show dilution, the defendant's use of the trademark must lessen the capacity of the plaintiff's trademark to identify and distinguish its goods and services and must be commercial in nature. For a dilution claim, Bally had to show that Faber's use of its famous trademark was commercial in nature. Bally also had to show that Faber's use diluted the value of the trademark by lessening the capacity of the mark to identify and distinguish goods and services.[18]
Faber's use of the Bally trademark was noncommercial. He did not use the trademark for the benefit of his own business, and Bally could not show that Faber's use had tarnished the trademark. Faber's site could not confuse consumers, and the court granted the motion for summary judgment.
RECOMMENDATIONS TO ORGANIZATIONS
For even the most stable organization, gripe sites can be an embarrassing nuisance. Potential customers and employees do look at these sites. www.walmartsucks.com has received over 1,000,000 hits through the past three years. Here are some recommendations that may prevent problems.
Some organizations actually purchase the names of potential gripe sites, thereby making them unavailable for outsiders. For example, Chase Manhattan bought the Web site rights to several Web sites, including IhateChase.com, ChaseStinks.com, ChaseSucks.com, ChaseBlows.com, and several others not appropriate for this journal.[19] That did not stop a disgruntled customer from setting up his own gripe site at chasebanksucks.com. It may make it more difficult for potential customers to find the gripe site.
Organizations would be wise to read their gripe sites regularly. Because of the freewheeling nature of the Internet, there is no real control over the contents of any Web site. A single unhappy person can spread false rumors that could be detrimental to employee morale or even the corporation's reputation.
Lastly, an organization should keep its perspective on gripe sites. Most gripe sites are simply one unhappy customer or ex-employee letting off steam harmlessly. Most of these sites can be safely ignored, unless they threaten personnel or present confidential documents obtained through an internal security leak.
CONCLUSION
Dissatisfied customers have the free speech right to criticize organizations publicly on the Internet. Bally v. Faber allows individuals to use the trademarked logos on such sites as long as there is no reasonable chance of confusion. As the Internet continues to grow, gripe sites will become more common. Organizations should evaluate these sites and learn from them about their relationship with their customers and employees, m
Notes
1. www.ballyfitness.com
2. Andrew Malone, Masters of their domain, the scramble for insulting websites, New York, June 8, 1998.
3. Fed. R. Civ. P. section 56(c).
4. 15 USC sections 1051-1127.
5. Article I, Section 8, Clause 3.
6. Mark Warda, How to Register a United States Trademark, Sphinx Publishing, Clearwater, Florida, 1988, 10-11.
7. section 32[a][1].
8. Steven W. Kopp and Tracey A. Suter, Trademark strategies online: implications for intellectual property protection, Journal of Public Policy & Marketing, Spring 2000, 119.
9. J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, section 24:89 at 24-137-38 (1997).
10. American Express v. American Express Limousine Service, 772 F. Supp 729 (E.D.N.Y. 1991).
11. 15 USC section 1114(1)(a).
12. Petro Stopping Centers L.P. v.James River Petroleum, Inc., 130 F. 3d 88 (4th Cir. 1997).
13. Levi Strauss & Co. v. Blue Bell, Inc., 778 F. 2d 1352, 1363 (9th Cir. 1985).
14. Id.
15. Fleischmann Distilling Corp. v. Maier Brewing Co., 314 F. 2d 149, 152-53 (9th Cir. 1963).
16. Yale, Electric Co. v. Robertson, 26 F.2d 972 (2d Cir. 1928).
17. Bally, 1163 - 1164.
18. Note, "Bally Total Fitness Holding Corp. v. Faber," 15 Berkeley Tech. L.J. 229, 2000.
19. Robert Trigaux, Bank-bashing goes digital at internet gripe sites, American Banker, March 26, 1999, 1.
PHOTO (BLACK & WHITE): EXHIBIT 1: Bally's Logo
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By Edward H. Freeman

Edward H. Freeman, JD, MCT (edfreeman@hotmail.com) is an attorney and educational consultant in West Hartford, Connecticut. He has written 25 articles on computer technology, privacy, security, and legal issues and has spoken at a number of professional conferences. He is also an adjunct faculty member at Central Connecticut State University in New Britain, CT and Tunxis Community College in Farmington, CT.

Source: Information Systems Security, Jan/Feb2001, Vol. 9 Issue 6, p9, 5p, 1bw.

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