Agenda for 2007 Creating a Trademark Protection Program

From PLI’s Course Handbook

Understanding Trademark Law 2008

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creating a trademark protection program in the united states and abroad

Jon O. Webster

Bausch & Lomb Incorporated

This paper is a modified and updated version of CREATING A TRADEMARK PROTECTION PROGRAM by Jon O. Webster, Joe Kucala and David B. Sherman included in the Understanding Trademark Law 2007 PLI Program.

CREATING A TRADEMARK PROTECTION PROGRAM

IN THE UNITED STATES AND ABROAD*

Jon O. Webster

* This paper is a modified and updated version of CREATING A TRADEMARK PROTECTION PROGRAM by Jon O. Webster, Joe Kucala and David B. Sherman included in the Understanding Trademark Law 2007 PLI Program.

Biographical Information

Name: Jon O. Webster

Position or Title: Senior Counsel – Trademarks

Place of Business: Bausch & Lomb Incorporated

Address: One Bausch & Lomb Place, Rochester, NY

14604

Phone: (585) 338-8905

Fax: (585) 338-8706

E-Mail:

Primary Areas of Practice: Intellectual property; litigation

College: University of Chicago

Law School: State University of New York at Buffalo

Work History: 1984-1986 – Judicial Law Clerk, NYS Appellate Division

1986 – 1989 Nixon Peabody

1989 – Current – Bausch & Lomb Incorporated

Membership in Associations, Committees, etc.: INTA, NYS Bar Association, Speaker at INTA, PLI, NYS Bar Association

I.Introduction

A.Trademark Basics

B.Trademark Registration in the U.S. and Abroad

C.Creating a Trademark Protection Program

II.Trademark Basics

A.What is a Trademark / Service Mark

B.Types of Trademarks

C.Choosing Which Trademarks To Register: Practical Considerations

D.Obtaining Protection in the U.S. and Abroad

III.Trademark Protection in the U.S. and Abroad

A.Federal Trademark Registration in the U.S.

B.Trademark Registration Abroad

IV.Creating a Trademark Protection Program

A.International Registration Strategies

B.Protection Strategies

C.Internal Licensing Situations

D.Portfolio Management & Review

E.Effective Docketing Procedures

F.Extracting Value from the Portfolio

V.Conclusion

Introduction

These materials provide a basic overview regarding developing and implementing a global trademark registration and protection program, including strategies for selecting, registering and enforcing marks.

Creating A Trademark Protection Program

I.Introduction

A.Trademark Basics

B.Trademark Registration in the U.S. and Abroad

C.Creating a Trademark Protection Program

II.Trademark Basics

A.What is a Trademark / Service Mark

1.A trademark can be any word, phrase, name, symbol, logo, or design used to identify and distinguish one’s goods.

Some examples of trademarks are KODAK® film, the McDonald’s® Golden Arches, the WHOPPER® hamburger, and GE® light bulbs. The script form of word marks can be protected as a design as well, as in the case of the Coca-Cola® cursive mark.

2.A name used to identify your business entity or a fund is a service mark.

3.The financial product, itself, may be a trademark or service mark.

4.Both are a different type of mark but accorded the same rights and benefits, and subject to the same risks and criteria for assessing that risk.

5.A trade name is merely the name of a business used to distinguish that business from others. A mark such as McDonald’s® can be a trademark (for food), a service mark (for restaurant services), and a trade name (for the business itself) at the same time.

B.Types of Trademarks

In general and specifically for registration purposes, the mark should ideally be as “inherently distinctive” as possible in order for the United States Patent and Trademark Office (the “USPTO”) to approve registration. The USPTO views the strength of a mark on a scale of distinctiveness, with generic terms at one extreme and arbitrary and fanciful marks at the more desirable opposite extreme.

1.Generic

Generic terms include the common names for goods, such as BOAT for a boat or BANK for a financial institution; these terms are not likely to distinguish any goods or services from others and therefore they are not awarded protection as trademarks or service marks.

2.Descriptive

Descriptive marks are stronger than generic marks; these marks describe one or more characteristics of the goods, such as EXTRA CRISPYTM fried chicken. Still, it is difficult to register and to enforce exclusivity of descriptive marks unless the owner can demonstrate an acquired distinctiveness or secondary meaning due to extensive use and publication of the mark. It must be demonstrable that the public associates this mark with the particular source of the goods.

3.Suggestive

Suggestive marks are more easily registered with the USPTO. These marks suggest (instead of describe) one or more of the characteristics of the goods or services they are intended to identify. Some famous suggestive marks are IVORY® for soap, COPPERTONE® for suntan lotion, and ARRID® for deodorant. This type of mark need not prove secondary meaning or acquired distinctiveness in order to meet the standards of registration and protection.

4.Arbitrary and Fanciful

The strongest marks and the marks most readily registrable are arbitrary and fanciful marks, which bear no apparent relationship to the goods or services they identify. An arbitrary mark employs an ordinary term that is unrelated to the product, such as TIDE® detergent, CAMEL® cigarettes, or APPLE® computers, while a fanciful mark uses an invented term with no ordinary meaning such as KOTEX® feminine products, XEROX® copiers, or KODAK® cameras. These types of marks are granted the widest range of legal protection as they are considered the most inherently distinctive.

C.Choosing Which Trademarks To Register: Practical Considerations

1.The Trademark Owner

Before attempting to obtain trademark protection, a trademark owner must identify which mark(s) it seeks to register including the rationale and basis for seeking registration. In doing so, the trademark owner may consider the following factors:

Corporate structure: Who will be the owner?

National or Multinational
Parent / Subsidiaries
IP Holding Company

Budget

Search and clearance fees
Application and registration filing fees
Attorneys fees (domestic and international)
Maintenance costs (guarding against dilution, preventing trademarks from becoming generic, maintaining use and registration, monitoring the marketplace, conducting periodic audits, etc.)

Trademark development costs

Return on investment
Projected sales
Life expectancy of trademark (long vs. short)

Geography

Scope of present and future sales and advertising
Promotional and marketing activities may impact whether to file only in Roman letters/English or in other languages (Chinese traditional/simplified, Japanese/Katakana, Korean, Cyrillic, etc.)
Location of production

In many territories, the production of a product bearing a trademark constitutes use of that mark. Accordingly, the mark should be searched and registered in any territory prior to manufacturing in that territory. Otherwise, you can encounter a situation where a third party owns your mark and shuts down your plant in the middle of production, which is costly. This is an important part of trademark searching and filing strategy. In some territories, one solution to the problem of a third party owning the mark is to have the product manufactured there and the labels applied in another territory – this is done in China sometimes – but this not always a cost effective remedy.

Location of competitors

Defensive registrations

Prevent third parties from obtaining presumptive rights that may impact your ability to adopt marks, even if the proposed mark is arguably descriptive
Attempting to register purportedly descriptive/non-distinctive terms

Domain names

Primary registrations
Defensive registrations
Registering formative domain names
Cost / benefit analysis: How far do you go?

2.Types of Goods and Services

Likelihood of counterfeiting

Importance of branding to the target consumers?

Consumer or trade item?

“Impulse” item?

Cost of registering in multiple classes

Specifications of goods / services

Broad vs. narrow protection

Narrow protection may provide limited rights, reduced ability to enforce rights just outside the ambit of coverage
Broad protection could delay, complicate, and increase the costs of registration
For example, in the U.S. and Korea, it is not possible to obtain registration for marks under class-wide headings or extremely broad classifications of goods / services in the same way that it is possible under Madrid.
What is an appropriate balance?

3.Value of the Trademark: Balancing the Relative Importance of Marks

Primary Trademarks

Logos

If a company is going to invest in the development of a particular stylized mark, such as the script Coca Cola mark or the Nike Swoosh design, they may want to register it to prevent another company from using a similar stylization/color scheme, in addition to registering the word mark alone, which allows for the broadest protection.

Sub-brands and Secondary Marks

4.Registrability

It is generally less costly from both the filing and enforcement perspective to use trademarks that are easily registrable.

Arbitrary and Fanciful Marks are the most readily registrable because they are considered the most inherently distinctive.

Suggestive Marks are more registrable than generic or descriptive marks because they are considered to be more inherently distinctive and do not require a showing of secondary meaning or acquired distinctiveness to obtain registration.

Descriptive marks are more difficult to register because they require the party seeking registration to prove that the mark has acquired secondary meaning. Even when such a showing cannot be made to obtain registration, it may be valuable to attempt to register descriptive marks in order to defend against registration attempts by other parties. Nevertheless, such marks might require less time and money in building brand awareness.

To aid in the registration process, it is helpful to develop standardized descriptions of goods / services to apply generally and to the extent possible.

Of course, the successful and continued registration of a mark depends upon additional factors, including but not limited to searching, clearance, filing, examination, foreign filing, maintenance, and policing the mark.

D.Obtaining Protection in the U.S. and Abroad

1.Types of U.S. Trademark Applications

Intent-to-Use: An application for registration of the mark can be filed before the mark is actually used. The advantage of this intent-to-use application is that it provides notice of your claim to a mark prior to actual use of the mark and therefore, would make the mark unavailable to others.

Use-Based: An application for registration of a mark can be filed based on actual use of the mark in commerce. The advantage is that no additional filing perfecting use of the mark needs to be made before the mark can be approved for publication.

Practice Point: Specification of Goods: USPTO’s decisions holding any error in specifying the goods or services claimed in an application (or a Section 8/15 affidavit or renewal) will almost ensure an application or registration will be lost in its entirety irrespective of the owner’s intent (see, Medinol Ltd. v. Neuro Vasx Inc., 67 USPQ 2d 1205 (TTAB 2003)). It is important to therefore accurately set forth the description of goods/services to those actually contemplated.

Priority Filings: US trademark law provides several mechanisms pursuant to which a foreign trademark owner can use the priority established by a foreign trademark filing when making a filing in the United States.

Section 44(d) of the U.S. Trade Mark Act provides the trademark owner with a basis for receipt of a priority filing date in situations where the U.S. filing is made within six months of the filing date of the foreign application. A Section 44(d) filing is treated as if it were filed in the United Sates on the same day as the filing in the foreign country and will receive priority over any application for a confusingly similar mark filed in the U.S. after the priority date. The Section 44(d) filing only provides a basis for receipt of a priority filing date, however, but not a basis for publication or registration.
Section 44(e) of the U.S. Trade Mark Act allows a foreign trademark owner the luxury of relying on a registration granted by the applicant’s country of origin as a basis for registration in the United States. Although the Section 44(e) filing does not confer on the trade mark applicant a priority filing date, benefits of such a filing include that the applicant does not need to allege use or provide specimens of use in order to secure registration, all that is needed is an assertion of a bona fide intention to use the mark in commerce.
Regardless of the priority of the foreign filing, in order to obtain a federal trade mark registration, there must not be any third party applications or registrations for confusingly similar marks which predate the Section 44 filing which could be cited by the Examining Attorney as an impediment.
Practice Point: Another reason to consider filing for registration protection even for proposed use is that foreign fame may not be enough to justify trademark protection for unregistered marks in some U.S. jurisdictions (see, e.g., ITC Limited v. Punchgini, Inc., Case No. 05-0933 (2nd Cir. Feb. 26, 2008)).
Practice Point: Fourth Circuit held in 2007 that a foreign company, whose only contact with US is an application in the USPTO, may nonetheless be required to produce a foreign witness to testify at a deposition (Rosenruist-Gestao E Services LDA v. Virgin Enterprises Ltd., 511 F.3d 437 (4th Cir. 2007)).

State Registrations: Many states have their own trademark registration systems. If a mark is only used in one state, this is a way to obtain a registration, as use in interstate commerce is required for federal registration. On the same token, a prerequisite of obtaining state registration is that the trademark is used in the state where protection is sought. While state registration systems do not include any substantive application review, they provide a low-cost way for the owner of a trademark that is used only locally or regionally to provide legal notice of their use to others.

Common Law Protection: Because protection under the Lanham Act, 15. U.S.C. § 1051(d), is based on use in commerce, registration is not required to obtain protection. Therefore, unregistered trademarks may be protected in the U.S. under common law within the geographic area in which they are used.

2.International Applications: Registration-Based Protection

In the vast majority of the world, registration is essential because trademark rights stem solely from a registration. Under such a regime, a party does not have any trademark rights unless they have a registration. As a result, a party could not sue an “infringer” and it could be sued for infringement by a registrant – even if the registrant is a pirate.

For example, under the Community Trade Mark system, protection is contingent upon registration. Unlike the U.S., no use or intent-to-use is required to obtain registration.

Protection is country-specific. Thus, a U.S. trademark does not grant the user any protection outside of the U.S.

Priority Filings: Various foreign trademark regimes provide mechanisms pursuant to which a U.S. trademark owner may use the priority established by a U.S. trademark filing to register abroad.

For example, under the Madrid Protocol, a claim of priority in an international application may be based on a U.S. application in accordance with Article 4 of the Paris Convention (even if the filing date of the basic application precedes the implementation date of the Madrid Protocol in the United States). The international application must both (1) assert a claim of priority and (2) be filed in the USPTO within six months after the filing date of the basic application that forms the basis of the priority claim.

III.Trademark Protection in the U.S. and Abroad

A.Federal Trademark Registration in the U.S.

1.Registration with the USPTO

 Although trademark rights in the U.S. accrue from use instead of registration, it is safer and less expensive to register a trademark with the USPTO than it is to use the mark and then, upon learning of another’s use of the mark, file an opposition or cancellation proceeding with the USPTO or file a trademark infringement lawsuit.

 Current USPTO filing fees are:

$375 per class for an application filed on paper;
$325 per class for an application filed electronically using the Trademark Electronic Application System (“TEAS”); or
$275 per class for a TEAS Plus application that meets the requirements of 37 C.F.R. §§2.22 and 2.23.

A full USPTO fee schedule is available at:

2.Benefits of Obtaining U.S. Trademark Registration

Constructive notice to public of claim of ownership

Legal presumption of ownership of mark and exclusive right to use mark

Ability to bring an action in federal court

Additional protection

A federally registered trademark used continuously for a period of five years may become “incontestable” upon the filing of a declaration with the USPTO. 15 U.S.C. § 1065. Therefore, registration provides a trademark owner plaintiff with a sword by making infringement easier to prove, and because it provides a trademark owner defendant with a shield against lawsuits by an alleged prior user.

Use of U.S. registration as a basis to obtain foreign registration

3.U.S. Customs Protection

In the U.S., the owner of a valid federal trademark registration may register that mark with U.S. Customs & Border Protection (“CBP”), which is a bureau of the Department of Homeland Security and maintains a trademark recordation system for marks registered with the USPTO. CBP collects information from trademark owners relating to the trademark (i.e., who is authorized to use mark and where the mark is manufactured, sold, etc.) and enters that information into an electronic database that CBP officers use to actively monitor shipments entering the U.S. and prevent the importation of infringing goods. See

The appropriateness of foreign Customs registrations can be evaluated on a country-by-country basis, however there are obviously some territories in which counterfeiting is a more notorious problem. While certain countries may provide certain benefits from customs recordals, such benefits may be ineffective or unavailable in other countries.

B.Trademark Registration Abroad

1.Individual Country Registrations

Traditionally, parties seeking foreign trademark protection secured foreign local counsel and filed individual applications in the trademark office of each country in which it sought protection.

Because registration procedures and the protection flowing from a registration vary by country, there are many reasons why individual country filings might be preferred. Such reasons may include the substantive examination procedures of each country, the cost of individual registrations, the number of countries in which protection is sought or may be sought in the future, the duration of review and the time in which protection may be obtained, or the suitability of the available international protection schemes to a particular registrant’s needs.