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Trademark Act §1125 Unfair Competition

Trademark Act § 1125(a) False Designations of Origin and False Representations

• §1125(a): is, in essence, a Federal "unfair competition" statute.
  • §1125(a) prohibits two types of actions, the making of:
    • False designations of origin for goods and services
    • False representations or descriptions in relation to goods and services
      • It requires that:
        1. Nonfunctional subject matter be in issue.
        2. Likelihood of confusion, mistake, or misrepresentation in the marketplace in relation to the source or nature of goods or services be the result of an unremedied violation.

Protection of Trade Dress under §1125(a):

• §1125(a) has opened an avenue for unregistered trademarks (particularly trade dress) to be protected from unfair competition; it includes protection for "marks, etc.".
  • Product design is distinguished within the category of unregistered trade dress.

Trademark Act § 1125(c) Federal Trademark Dilution Act

• On January 16, 1996, Congress added a new provision to §1125 of the Trademark Act under the name of the Federal Trademark Dilution Act of 1995. This section, §1125(c), provides the owner of a "famous" mark with the right to seek an injunction, damages ([possibly trebled] in the case of willful conduct) and attorneys fees where another party's commercial use of the owner's famous mark would result or has resulted in the dilution of the mark's "distinctive quality".
  • Dilution can take the form of "blurring" and/or "tarnishment".
  • In the former, the diluted mark or one similar to it is used in relation to another party's goods or services, causing the diluted mark to no longer uniquely identify its owner's goods or services.
  • In the latter, the diluted mark or one similar to it is used by another party in such a way that the associations of quality that were previously made with it are diminished.
    

• Courts may use the following factors in determining "fame":
  1. The degree of inherent or acquired distinctiveness of the mark
  2. The duration and extent of use of the mark in connection with the goods or services with which the mark is used
  3. The duration and extent of advertising and publicity for the mark
  4. The geographical extent of the trading area in which the mark is used
  5. The channels of trade for the goods or services in relation to which the mark is used
  6. The degree of recognition of the mark in the trading areas and channels of trade used by the mark's owner and the person against whom dilution is alleged
  7. The nature and extent of use of the same or similar marks by third parties
  8. Whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register

• Specific exceptions to this protection are provided for:
  • Comparative advertising
  • Non-commercial use
  • News reporting

Trademark Act § 1125(d) Anticybersquatting Consumer Protection Act

• As part of the Intellectual Property and Communications Omnibus Reform Act of 1999, on November 17, 1999, Congress enacted the Anticybersquatting Consumer Protection Act. It amends §1125 by adding a new paragraph (d).
  • Under paragraph (d), if a mark is distinctive or famous, its owner has the right to recover in a civil action against a domain name registrant or its licensee who, with bad faith intent, registers, traffics in or uses a domain name which is identical or confusingly similar to (or dilutive of in the case of a famous mark) that mark.
  • A court may consider the following factors in determining whether a party had bad faith intent in a particular case:
    
    
    
    1. The defendant's intellectual property rights in the domain name
    2. The extent to which the domain name is the legal name of or identifies the defendant
    3. The defendant's bona fide use of the domain name in the commercial offering of goods or services
    4. The defendant's bona fide noncommercial use or fair use of the domain name
    5. The defendant's intent to divert consumers from the mark owner's site to that of the domain name for purposes that could impair the goodwill associated with the mark by creating likelihood of confusion as to source or relationship
    6. The defendant's offer to transfer or assign the domain name for financial gain without a bona fide intent to use or use of it commercially or a prior pattern of such conduct by the defendant
    7. The defendant's provision of false information in registering the domain name or a prior pattern of such conduct by the defendant
    8. The defendant's multiple registration, without regard to the related goods or services, of domain names in the categories protected by the Anticybersquatting Consumer Protection Act
    9. The extent to which the implicated mark is distinctive or famous
       
    • Bad faith intent will not be found if the domain name registrant reasonably believed that its use of the domain name was lawful.
  • The provisions of §1117 (including cybersquatting-specific statutory damages) apply to Anticybersquatting Consumer Protection Act claims which arose from conduct occurring after the passage of the Act.
    • Forfeiture, cancellation or transfer of the domain name can be ordered by the court in any action under §1125(d), regardless of when it arose.

• If a mark holder cannot find or obtain personal jurisdiction over the domain name registrant for the purposes of an action based on trademark registration rights or rights under §1125(a) or (c), he may file a civil action in rem against the domain name in the judicial district of the domain name registration authority which registered the domain or that of the court which holds the documents necessary to control its disposition.
  • The owner of the mark must first send notice to the domain name registrant at the address which the registrant gave to the domain name registration authority and then publish notice of the action shortly after its filing in the manner directed by the court.
    • Compliance with the above procedures constitutes service of process.
  • Forfeiture, cancellation or transfer are the only remedies available under this cause of action.
    • Domain name registration authorities are required to comply with any of the above remedies which a court orders and to not take any unordered action affecting a domain name registration while a claim is pending.
  • The in rem action above is in addition to any other available causes of action and their jurisdictional bases.

• Living individuals have the right to file a claim against parties who register domain names which are substantially or confusingly similar to their personal names.
  • An exception exists for domain names registration in order to commercially exploit a copyrighted work for which the domain name registrant is an owner of the copyright or a licensee of the owner of the copyright and such registration is not contractually prohibited by an agreement with the named person.
  • Forfeiture, cancellation or transfer of the domain name and other injunctive relief, as well as the awarding of costs and attorneys fees to the prevailing party are the remedies available in this particular type of claim.

Nothing in this site is intended in any way to constitute legal advice or to create an attorney-client relationship. The author, Jay M. Tyndall, shall not be liable for any damages of any type, whether actual or consequential, which may arise from the use or reliance of any reader on the content of this site or any site to which it links. No guarantee or assurance is made that any information transmitted to or via any unsecure portion of this site will remain confidential.