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The Trademark Modernization of 2020 (“TMA”) was signed into law on December 27, 2020, as part of the COVID-19 relief and government funding bill. It will be fully implemented and take effect on December 27, 2021. TMA brought some remarkable changes to the United States Trademark Act of 1946, a.k.a. the Lanham Act, that will significantly affect brand owners in the U.S.

TMA Codifies Rules for the “Letters of Protest” Practice

There has been a long-standing yet not well-known practice of the USPTO, called the “letter of protest,” which allows third parties to submit evidence to the USPTO prior to registration, regarding a trademark’s registrability. Before the TMA, the USPTO did not have a formal process in place for submitting or reviewing these letters of protest, and it has resulted in the underutilization of this process. The TMA formalizes this letter of protest process for submitting evidence against pending third-party trademark applications by giving it statutory authority. The letter of protest submissions must identify each legal ground for an examining attorney to refuse registration or issue a requirement, include evidence that supports those grounds, and a concise description for each piece of supporting evidence. Following the passage of the TMA, the USPTO issued rules setting out the letter of protest procedures and a $50.00 fee for these submissions that went into effect on January 2, 2021. TMA requires the USPTO to act on submissions of letters of protest within two months of receipt. 

The codified letter of protest process under the TMA provides third-parties with a simpler and cheaper procedure compared to the traditional opposition procedure, which limits third parties believing that they may be damaged by the federal registration of a mark to file an opposition during a 30-day opposition period occurring just before registration of the mark in question and pay the expensive opposition filing fees (increased to $600.00 per class from $400.00 this year).

  • Takeaway: Any brand owner now may use this simpler and inexpensive formal process to attempt to intervene in a third-party application for a trademark that may conflict with your mark, or that you believe should otherwise be refused registration, by asking the USPTO to consider evidence that it may not otherwise have in the examination record. On the other hand, the letter of protest process may also be disadvantageous to some brand owners by making it more difficult to secure a trademark registration. To help make the most of this new process, brand owners should consider setting up trademark watch services that alert the brand owner to pending applications for marks that may conflict with the brand owner’s mark.

TMA Enables the USPTO to Shorten Office Action Response Deadlines to Anywhere Between 2 Months and 6 Months

In order to free the USPTO trademark register from numerous illegitimate trademark applications that are not actually used in the U.S. commerce, TMA gives the USPTO the authority to set office action response periods that are shorter than the current six-month response time, but not less than 60 days from the Office Action issuance date. If needed, the applicant may request to extend the shortened response deadline to up to six months.

  • Takeaway: Brand owners now must pay special attention to the actual response deadline upon receipt of an Office Action, as we may start seeing much shorter response periods than the six-month response deadline that we are used to.

TMA Creates New Ex Parte Expungement and Reexamination Proceedings as New Methods for Seeking Cancellation of a Third-party Trademark Registration

Before the passage of the TMA, the USPTO permits inter-parte Cancellation proceedings that are similar to court litigation against trademark registrations, which occur before the Trademark Trial and Appeal Board (TTAB). There are a number of grounds on which someone may petition to cancel a third-party registration, including the registration owner’s abandonment or lack of use of the registered mark in interstate commerce.  

TMA provides a new post-registration procedure for ex parte expungement of certain improperly granted registrations. Specifically, it allows anyone to petition the USPTO to expunge a registration, either in whole or in part, where there are specific goods or services listed in the registration for which the trademark has never been used in U.S. commerce. This new procedure must be brought between three to ten years after the registration date.

On the other hand, a reexamination proceeding may be initiated against a registration any time before the fifth year following the registration date for any registration based on use in commerce. The new trademark reexamination procedure provides a process for challenging registrations based upon a false, but not necessarily fraudulent, declaration of the mark’s use in association with the goods and services identified in the registration. When preparing a trademark application, applicants often include many (or all) of the goods and services that fall within the “class” of goods or services initially selected by the applicant. Trademark applicants often try to include as many goods and services as possible under the same class because their filing fee covers the registration of a mark under the entire class. However, this practice violates the spirit of the law, which requires actual use of the mark in association with each good or service identified in the registration. To rectify the proliferation of overzealous registrations resulting from this practice, TMA’s reexamination procedure allows for the cancellation from the registration, each good or service with which the mark was not being used as of the filing date of the mark’s declaration of use.

For both the Ex Parte Expungement and Reexamination proceedings, the USPTO’s decision to cancel a registration is appealable, and these proceedings may be initiated against registrations that registered before or after enactment of the TMA.

  • Takeaway: It is critical for brand owners to make sure that they actually provide all the goods and services listed in their trademark registrations, or be exposed to the risk of losing part or all of their registrations for lack of use in commerce.

TMA Restores the Rebuttable Presumption of Irreparable Harm for Plaintiffs Seeking Injunctive Relief in Trademark Infringement Cases.

Before TMA, in order for a trademark infringement plaintiff to obtain a court-ordered injunction against a defendant to stop the defendant from continuing to use the disputed mark, the plaintiff must prove several elements, including that the plaintiff will be irreparably harmed without the injunction. In recent years, the federal circuit courts in the United States have been split on whether the irreparable harm element should be presumed in trademark infringement cases where the court has found either infringement (for a permanent injunction) or that the plaintiff is likely to be successful on the merits of its infringement claim (for a preliminary injunction).

The TMA resolves the circuit split by codifying into law that trademark infringement plaintiffs shall be entitled to a rebuttable presumption of irreparable harm without the injunction upon a finding of trademark infringement or likelihood of success on the merits, depending on whether the plaintiff is seeking a permanent or preliminary injunction.

  • Takeaway: Brand owners now have a reduced evidentiary burden for obtaining injunctive relief to protect their trademark rights. A brand owner who proves infringement will enjoy a favorable legal presumption that the harm caused by continued infringement will be irreparable.

If you need help with registering a new trademark with the USPTO, contact us today to discuss your trademark protection strategies with an experienced trademark attorney. Schedule an appointment with us to schedule a free initial consultation! 

It is the new year and a lot of us resolved to work out more and get stronger. But don’t limit your strength training to just your muscles–your trademarks deserve a little boost as well!?

Why is trademark strength important?

U.S. trademark law recognizes a spectrum of distinctiveness that provides a sliding scale of trademark protectability. Judge Pierre Leval defined trademark strength as the amount of “legal muscle” possessed by a given mark.

The stronger the mark, the more uses the trademark owner may exclude from the marketplace through a trademark infringement or dilution action. Stronger marks are able to exclude more similar marks from the marketplace. Such increases can happen along two fronts: “appearance” of the trademark and the “goods or services” the trademark protects. The stronger a registered trademark is on the “appearance” dimension, the less similar the look, sound, and spelling a third-party’s mark must be in order to risk being excluded by the registered trademark. The stronger a registered trademark is on the “goods or services” dimension, the less similar the goods or services offered by a competitor using the same or similar marks must be in order to risk being excluded by the registered trademark.

A trademark’s relative strength or weakness will also have a direct bearing on its performance in the market. A mark that is highly distinctive functions as a strong mark, identifying the owner as the source of the covered products or services. When a mark is not distinctive or it may already be used by others on or in connection with different products or services, the mark is considered weak.

Therefore, trademark strength is extremely important for trademark owners as it has a strong impact on the value of the trademarks to their owners. It is generally easier and less costly for a trademark owner to acquire and enforce exclusive rights in a strong trademark that is distinctive and unique than one that is descriptive or highly diluted, i.e., widely used.

How is a mark’s strength or weakness gauged?

The relative strength or weakness of a trademark may be gauged by placing the trademark on a spectrum. The types of trademarks discussed below range from the strongest to the weakest.

  • Fanciful or Coined Marks. A fanciful or coined mark is at the strongest end of the spectrum because it is inherently distinctive. Such a mark consists of an invented word that is a combination of letters that has no meaning. For example: GOOGLE for online services, PEPSI for soft drinks, ROLEX for watches, and XEROX for copiers. Since a fanciful or coined mark has no inherent meaning, in the beginning, a bigger effort in terms of advertising is necessary in order to educate the public as to the relationship between the invented word and the owner’s product or service. However, these marks enjoy the broadest scope of protection against third-party use.
  • Arbitrary Marks. An arbitrary mark is composed of a word or words that have a common meaning in the language of the relevant jurisdiction; however, that meaning is unrelated to the goods or services for which the mark is used. Arbitrary marks, such as CAMEL for cigarettes and APPLE for computers, are considered highly distinctive in identifying and distinguishing products or services. As with fanciful or coined marks, the public must be educated as to the association of the arbitrary mark with the relevant product or service, but the scope of protection obtained is very broad.
  • Suggestive Marks. A suggestive mark gives consumers some sense of the nature of the products or services that a business will provide without actually describing the product or service. A suggestive mark is one that requires “a mental leap from the mark to the product”, or, “the consumer’s imagination, thought, and perception to reach a conclusion as to the nature of the goods or services.” Variety Stores, Inc. v. Wal-Mart Stores, Inc., 888 F.3d 651, 662 (4th Cir. 2018). Examples of suggestive marks are AIRBUS for airplanes and NETFLIX for streaming services. Suggestive marks can possess an inherent element of sales appeal and will require less education of the public than coined or arbitrary marks; for this reason, generally, suggestive marks are entitled to less-extensive protection.
  • Descriptive Marks. In general, a descriptive mark is a word (or words) that merely describes a product or that contains ingredients or attributes that are too weak to function as a trademark. An example of a merely descriptive mark would be COLD AND CREAMY for ice cream. Such a mark is very unlikely to be granted registration, as the phrase merely describes an attribute of the product. Words that merely describe an attribute, feature, end result, or use of the product, or the persons employed in its production, generally are not granted trademark protection. Merely laudatory terms such as “best” or “quality” also are generally not registrable. In some jurisdictions, surnames are treated as descriptive marks. What is initially a descriptive word may later become protectable as a trademark if it acquires secondary meaning. In other words, if a descriptive word is used and advertised exclusively as a trademark for a sufficient period of time, it may, in addition to having the primary meaning that is descriptive of the product, come to identify the mark as being associated with a single source of origin for that product. An example of a descriptive word that has acquired a secondary meaning and become protectable as a trademark is SHARP for televisions.
  • Generic Words. A generic word can be thought of as the common name of the product or service in question—for example, “clock” is a generic word for timepieces. Such words can never be appropriated by a single party as trademarks for the products or services they signify, since the public perceives and uses them solely as common nouns or terms. Generic words or phrases are not registrable or protectable in relation to the products or services they signify.

How to select a strong trademark?

As a trademark applicant, you should try your best to come up with a strong new trademark that is inherently distinctive. The strongest types of trademarks are (1) fanciful or coined marks, such as EXXON for petroleum products, KODAK for photography company; and (2) arbitrary marks, such as AMAZON for retail services, APPLE for computers, SHELL for gasoline, and BLACKBERRY for cell phones. 

There are many resources online that can help you with the naming process of your brand. For example, what we found on this website: https://guide.onym.co/ or the books like “Brand Thinking and Other Noble Pursuits.” Check out our other blog post on how to choose a business name here

If you need help with determining your proposed trademark’s strength, contact us today to discuss your trademark protection strategies with an experienced trademark attorney. Schedule an appointment with us to schedule a free initial consultation! 

The U.S. Customs and Border Protection (CBP), a bureau of the Department of Homeland Security, is the nation’s largest federal law enforcement agency that is charged with securing the nation’s borders and facilitating international travel and trade. It plays an underrated role in helping businesses enforce their intellectual property rights. Businesses may work with CBP to protect their intellectual property rights against counterfeiters. CBP has the authority to determine infringement of intellectual property rights at the US border and enforce intellectual property rights by excluding from entry, detaining, and seizing goods that infringe the business’s intellectual property rights such as trademarks, copyrights, and patents. How can CBP help with Intellectual property rights enforcement and fight against counterfeits? Intellectual property rights enforcement is complex and CBP relies on assistance from intellectual property rights owners to effectively carry out its enforcement authority. To obtain full CBP protection against the importation of goods bearing infringing trademarks, trademark owners should record their federally registered trademarks with CBP. Only trademarks registered on the USPTO’s Principal Register are eligible for CBP recordation. Common law trademarks and trademarks registered on the USPTO’s Supplemental Register cannot be recorded with CBP. It is important to record trademarks with CBP because CBP has no authority to prevent the importation of goods bearing a confusingly similar mark if the mark has not been recorded with the CBP. Therefore, even if the goods bear a mark that copies or simulates a mark registered with the USPTO, if the mark has not been recorded with CBP, the goods are not subject to detention or seizure. CBP and Counterfeits A counterfeit mark is a “spurious mark that is identical with, or substantially indistinguishable from,” a federally registered mark. CBP is obligated to seize and seek forfeiture of imported goods deemed to bear a “counterfeit” mark, whether or not the mark is recorded with CBP.  CBP has authority to seize goods bearing counterfeit marks because of the Tariff Act of 1930 and Federal Criminal Code, which provide for criminal penalties, including fines, against persons who intentionally traffic in counterfeit goods. CBP may impose a civil fine against any person who directs, assists financially or otherwise, or aids in the importation of goods bearing a counterfeit mark. Knowledge that the product is counterfeit is not required for civil liability. CBP also maintains the Intellectual Property Rights Search (IPRS) database, which contains information on recorded trademarks (as well as copyrights and trade names) and the IPRS database is available to the public. How can Intellectual Property Owners Effectively Work with the CBP  Here are a few steps intellectual property owners can take to increase the likelihood that CBP will discover and take action against infringements:
  1. Provide CBP with information regarding their trademarks and products (such as by making a product identification training guide and providing product identification training)
  2. Report suspected infringing imports to CBP
  3. Create and implement an intellectual property security plan
Navigating how you can work with the CBP to protect your company or product against counterfeits may seem daunting. It is always helpful to enlist the assistance of a professional intellectual property attorney. We are here to help you fully understand the benefits and details of working the the CBP to protect your intellectual property rights. Find out how Carbon Law Group can help you protect your intellectual property rights by scheduling a meeting with us using this link.  

Did you know that color, sound, scent, and hashtags can be protected by trademarks? 

Traditionally, trademarks are words or symbols used to identify the source of a product or service. Most trademarks are word marks such as COCA-COLA; or design marks/logos such as ; and slogans, such as Coca-Cola’s “It’s The Real Thing.”

However, the list of things that can be registered as trademarks under the Lanham Act is actually very broad. There are practically no limitations to the subject matter of registrable marks, so long as the mark is capable of acting as an identifier of source, whether because it is inherently distinctive, or it has acquired distinctiveness and the mark is not functional.

Here is a list of non-traditional trademarks: 

Color Mark

The registrability of a color mark depends on the manner in which the proposed color mark is used. Color takes on the characteristics of the object or surface to which it is applied, and the commercial impression of color will change accordingly. Color marks are never inherently distinctive, and cannot be registered on the Principal Register without a showing of acquired distinctiveness.

Color, whether a single overall color or multiple colors applied in a specific and arbitrary fashion, is usually perceived as an ornamental feature of the goods or services. However, color can function as a mark if it is used in the manner of a trademark or service mark and if it is perceived by the purchasing public to identify and distinguish the goods or services on or in connection with which it is used and to indicate their source. 

Sound and Scent Mark 

A sound mark identifies and distinguishes a product or service through audio rather than visual means. Sound marks function as source indicators when they “assume a definite shape or arrangement” and “create in the listener’s mind an association of the sound” with a good or service. Some famous sound trademarks include the iconic ticking of 60 Minutes’ stopwatch that CBS trademarked and the sound of a lightsaber, FYI, is described as “an oscillating humming buzz created by combining feedback from a microphone with a projector motor sound.”

Some scents that are protected by trademarks include the scent of Play-Doh, which is described as “a unique scent formed through the combination of a sweet, slightly musky, vanilla-like fragrance, with slight overtones of cherry, and the natural smell of a salted, wheat-based dough;” and the “flowery musk scent” in verizon stores.

A trademark applicant that wishes to register a sound or a scent trademark is not required to submit a drawing if the mark consists only of a sound, a scent, or other completely non-visual matter.  For these types of marks, the applicant must submit a detailed description of the mark.

Hashtag Mark

A “hashtag” is a form of metadata consisting of a word or phrase prefixed with the symbol “#”. Hashtags are often used on social networking sites to identify or facilitate a search for a keyword or topic of interest. 

As hashtags became increasingly more popular on social media, in 2013 the United States Patent and Trademark Office (USPTO) recognized hashtags as registrable trademarks “only if [the mark] functions as an identifier of the source of the applicant’s goods or services.” The addition of the term HASHTAG or the hash symbol (#) to an otherwise unregistrable mark typically will not render it registrable.

Some examples of hashtag mark the USPTO has granted registration include: 

#EVERYDAYMADEWELL for “online retail store and retail store services in the fields of clothing, footwear, bags, sunglasses, jewelry, watches, and fashion accessories”

#HOWDOYOUKFC for “restaurant services

#THESELFIE for “photography and videography equipment, namely, remote shutter releases

Unique challenges applicants of non-traditional trademarks face

Federal registration of trademarks generally confers certain benefits to the trademark owner However, non-traditional trademarks face unique challenges that traditional trademarks don’t face in registering with the USPTO. Non-traditional trademarks can take longer and cost more to register and in addition to the distinctiveness and non-functionality hurdles, challenges exist in clearing the marks for registration due to the complexity involved in searching Non-traditional trademarks on TESS; fulfilling technical requirements for registration involved in providing the appropriate drawing and specimens for marks that are not easily depicted on paper; and the unique unpredictability due to a lack of successful precedents to provide guidance. Even if it is registered, a non-traditional trademark may be difficult to enforce. Furthermore, the inherent challenges in searching non-traditional marks make it hard to monitor infringement of the mark. 

If you need help with your non-traditional trademark, contact us today to discuss your trademark protection strategies with an experienced trademark practitioner.

When starting a company, your brand is of your most valuable assets. However, an often overlooked area of creating and launching a brand is trademark protection.

Entrepreneurs often wonder whether it is worth filing for a federal trademark. While you establish some rights the moment you start using a brand, there are significant advantages to registering your name, logo, or packaging design.

Here are nine advantages to filing for and obtaining federal trademark protection on the Principal Trademark Register:

  1. Prima facie evidence of validity and the registrant’s ownership of the mark.
  2. Constructive nationwide use of the mark.
  3. Federal court subject matter jurisdiction over infringement and other trademark claims without a showing of diversity or minimum amount in controversy.
  4. Statutory remedies for federal trademark infringement claims, including, under certain circumstances:
    • treble damages; and
    • recovery of attorneys’ fees and costs.
  5. Constructive notice of ownership, which eliminates the defenses of good faith use and innocent adoption.
  6. The right to use ® and other notices of federal registration.
  7. After five years the registration may, subject to limited exceptions, become incontestable and be deemed conclusive evidence of the owner’s exclusive rights to use the mark.
  8. A registration may be recorded with US Customs to stop the importation of infringing, counterfeit, and gray market goods.
  9. A registration may provide a basis for registering the mark in foreign countries.

Not all trademarks will qualify for the Principal Register. However, understanding your options and the best ways to register and protect your brand is a worthwhile investment. Contact us today to discuss your brand protection strategies with an experienced trademark practitioner.

When it comes to building your brand, there is some confusion around what it takes to establish trademark rights. Clients ask, is filing a federal trademark application enough to protect me? What about posting on social media?

These are great questions often without clear answers.

To understand how to best protect your trademark rights, it is important to understand the purpose of trademark laws in the first place. Trademark law, codified under the Lanham Act, is fundamentally a consumer protection statute. It was created to protect consumers from companies that try to steal the goodwill of popular brands to sell their products or services (think of those guys selling purses in NYC with interchangeable brand names). Trademarks are used as a source identifier. They allow consumers to differentiate between certain types of goods and their sources.

When it comes to establishing your brand, trademark rights are fundamentally based on the first to use the mark. That means, filing an application alone generally isn’t sufficient to protect your rights to a mark against someone who may have used the name earlier than you. Establishing legitimate use is critical.

But, what is legitimate use, you ask? Great question.

Legitimate use of a trademark that amounts to commercial use that would cause the public to associate your mark with your goods or services. It could be social media posts, a website, products, or apparel. Legitimate use also varies based on what you are selling. If you are selling goods, generally, you need to show the use on the good in a way that shows your goods are in interstate commerce and can be purchased. For services, proper use amounts to advertising the services, among other types of use.

When it comes to establishing priority over another company regarding a possibly infringing mark, the party that can show the earliest legitimate use of the name along with the strongest engagement with the consuming public will most likely win a dispute. A federal trademark application is important to protect your rights and establish your rights federally against later users in other locations. But to protect your rights locally and early, make legitimate use as early as possible.

Key Takeaway: when it comes to establishing priority, make sure you are gettings your goods or services in commerce early and effectively.

Every year, about ten to eleven thousand trademark attorneys and service providers converge on a major city to network, exchange ideas, and review the previous years’ developments in the world of trademarks. It is an exciting time for a trademark practitioner.
 
I had the good fortune of attending this years’ INTA convention in Seattle, Washington. It was four days of shaking hands, meeting new colleagues, and enjoying the several social events taking place each evening. I must say, of the various specialties in law, trademark lawyers know how to have a good time.
 
Every INTA is different for a variety of reasons. The location makes a huge impact on how you will attend the event. This year, given the conference was on the same coast as me, I had little reason not to attend. In the past, I have made it a point to attend many panel discussions and “lunch and learns,” where we break out into small groups to discuss timely topics in trademark law such as “Protecting Well-Known Marks,” “Protecting Domain Names,” and more. The most popular panel, however, takes place on the last day of the conference and is hosted by Ted Davis and John Welch, all-stars in the world of trademarks. Mr. Welch always makes his review entertaining, with the crowd in stitches many times throughout his presentation. Some of the key takeaways from this year were:
 
  • The number of 2(d) likelihood of confusion reversals granted by the Trademark Trial and Appeal Board was minuscule
  • Perhaps the most discussed decision was the Matal v Tam case which ruled that the prohibition under section 2(a) of the Lanham Act of the federal registration of potentially disparaging trademarks and service marks violated the Free Speech Clause of the First Amendment because the viewpoint was discriminatory and therefore subject to strict scrutiny.
  • The TTAB affirmed its refusal to register KLEER ADHESIVES for adhesives and mortar on the basis that the applicant’s goods were not transparent
  • In a case involving Dr. Dre, or Andre Young, the TTAB dismissed his opposition to Dr. Drai, an OBGYN and Media Personality citing there was no evidence of confusion between the marks and that the goods and services were unique enough to not cause confusion in the marketplace
The above highlights are but a few of the important decisions that change the way trademark practitioners must view and evaluate trademarks going forward.
 
Beyond a great review of current trademark decisions and meeting wonderful colleagues, we had a great time taking in the beautiful sights of Seattle.
 
For more information on how to create a strong brand and ensure it is protected, please email us at [email protected] or schedule an appointment to chat today!
 
P.S. I cannot forget to thank the awesome team at AltLegal for hosting me this year. If you are looking for a new docketing system for your practice, I highly recommend them. Yes, full disclosure, I am a recent investor, but I have been a big fan of what they are doing long before I decided to invest.

8.-Products-and-technology

My business holds a federally registered trademark, but someone else owns the “.com” domain containing my mark. Sound familiar to you or a “friend”? Domain names are arguably the most sought-after online property because of the ease and quickness by which any web user can acquire a domain name from popular hosts like GoDaddy. The common sense approach to this problem would be to search for the owner of the domain and reach out to them directly, but the likelihood of your receiving any response is small – with any action taken being even smaller. Fortunately, after having successfully filed hundreds of trademarks for our diverse group of clients, we have been able to identify and utilize effective means to obtain a domain name held by a “cybersquatter,” including the governing laws providing the grounds for our clients to obtain their rightful intellectual property.

 

What is “cybersquatting”?

Cybersquatting is the increasingly common practice employed by opportunistic individuals and entities of purchasing domain names in the hope of staking their claim to a popular company name idea or title. More often than not, attempting to access the domain through a web browser yields no result primarily because there was never any intent to utilize the domain for any commercial purpose. Fortunately, for federal trademark[1] owners and small businesses finding themselves having to pay lots of money for the domain name best associated with their mark, there are two routes that people or companies affected may take to combat this problem: (i) the Anticybersquatting Consumer Protection Act (ACPA)[2], and (ii) through the Uniform Domain Name Dispute Resolution Policy (UDRP) provided by ICANN[3].

 

(i) Understanding the Anticybersquatting Consumer Protection Act (ACPA)

Under the ACPA, cybersquatting is the “practice of registering, using, or selling a domain name containing language that is identical or similar to a current trademark owner’s mark with a bad faith intent to profit from the domain name.” Critical to this definition are the factors a court may use to determine if a domain name transaction is conducted “in bad faith”, counting for and against.

A domain name transaction is unlikely to be considered in bad faith if:

  1. the registrant herself has any trademark or IP rights in the name;
  2. the domain name contains the legal or nick- name of the registrant;
  3. the registrant used the domain name in connection with the good faith offering of goods and/or services; or
  4. there is lawful non-commercial or fair use of the mark in a website under the domain name.

On the other hand, a domain name transaction is likely to be considered in bad faith if:

  1. there is intent to divert a site that could harm the trademark owner’s goodwill-either for commercial gain or with intent to tarnish by creating likelihood of confusion as to source, sponsorship or affiliation, or endorsement of the site;
  2. there is an offer to sell the domain name without having used, nor having an intent to use, the domain in the bona fide offering of goods or services, or there exists a prior pattern of such conduct;
  3. the registrant intentionally provides misleading contact information in the domain name registration application, or has a history of such conduct;
  4. there exists a warehousing of multiple domain names that appear to be identical or confusingly similar to distinctive marks or dilutive of famous marks, without regard to the goods or services being provided; or
  5. the mark (not the domain owner’s mark) is particularly distinctive or famous.

Some of these factors are actionable under the Lanham Act, but that a softer qualification for purchasing or registering a domain is that there be a bona fide intent to launch goods, services, or a business – even if those plans never come to fruition. However, per subpoint D above, if a domain registrant sits on a mark that he or she knows to be famous and tied to another’s validly registered trademark, a claim for “bad faith” becomes stronger.

 

(ii) Understanding the Uniform Dispute Resolution Process (UDRP)

The UDRP administered by ICANN currently applies to the top level domains (TLDs) of .biz, .com, .info, .org, .net, and a few country code domains like .ac, and .mx. The definition of cybersquatting provided by ICANN is a “bad faith registration of another’s trademark in a domain name,” so traditional trademark rules related to unregistered “common law” and federally registered trademarks apply.

One of the big differences between the UDRP and ACPA is that the entire dispute resolution proceeding is conducted online, is generally resolved within 60 calendar days of the first filing, and is mandatory for TLDs contracted with ICANN (including “.com”). Once you or your counsel determine that a UDRP action is appropriate or necessary depending on the responsiveness of the current domain owner, the process begins by filing a complaint and sending a copy to the respondent (the current domain holder). The UDRP is generally lauded for its effective and timely dispute resolution process, and we have found that our trademark clients value its efficacy.

 

For more information and personalized guidance based on your circumstances, or if you are ready to commence an action through the UDRP, please speak with our technology attorneys by emailing us at [email protected] or call our office at (323) 543-4453 to schedule a consultation.


[1] Note that unregistered or “common law trademark” holders may be able to assert similar claims, but that their rights are limited to the outcome of dispute resolution (with little basis in codified federal law).

[2] 15 U.S.C. §1125(d) under the Lanham Act

[3] For more information, see this link.

As any entrepreneur or business owner knows, building a website or online storefront to advertise, promote, or sell goods or services can be a detailed, time-consuming, and expensive process. The goal of attracting even the most discerning consumer on the internet makes those extra hours and expense worth it, especially when general marketing and branding goals include repeated visits, contact, and impressions to finally engage a customer or user. All successful businesses similarly understand that protecting the logos, content, design, functionality and, most importantly, the integrity of the website. An attorney-drafted “Terms of Use” or “User Terms and Conditions” page is extremely important because it provides, among other benefits, a mechanism 1) to prevent competitor copying or intellectual property infringement, 2) to legally bind users of the website, 3) to limit the business liability in certain contexts, and 4) to comply with federal law.

1. Prevent intellectual property infringement.

Valuable dollars and hours are spent building a website for goods or services, but the failure to secure or enforce proprietary intellectual property rules can nullify all of that value. A valid Terms of Use will enumerate the myriad of intellectual property present on the business website, and will make it clear to all users (guests or registrants) that the copying, stealing, scraping, or unauthorized use of proprietary information is grounds for termination of any user account, a claim for breach of contract, and claims of copyright, trademark, or trade secret infringement, and any other remedy available at law to the business. While the deterrent impact of a Terms of Use may be debatable, failing to have a Terms of Use removes any enforcement mechanism for a business owner against a rogue user.

2. Legally bind users of the website.

Having a Terms of Use section on the business website is not required by law in the United States, but consider that it has been (and may solely be) a binding agreement enforceable by a court between any user or abuser on the internet and the business (even if no transaction of money for goods or services occurs). Because the website is the property of the business, businesses may set user standards for use of the site as well as the penalties for failing to comply, including to terminate a user account or ban future use. Having this ability is extremely important for any online business to ensure smooth user engagement and process management.

3. Limit the business liability.

A legally binding contract may include disclaimers against liability – and in certain cases, even where liability would normally be imputed by law. This includes common issue situations like outdated or incorrect marketing materials (especially those quoting prices or fees), governing the interactions between users (especially in the context of harassers or trolls), and updating the features or functionality of applications or other products. Note that by failing to disclaim against liability in these scenarios, a business may become an easy target for traditional lawsuits over small errors.

4. Compliance with privacy laws and the “privacy policy.”

If the site collects personal data that may identify an individual (e.g., a user’s email address, first or last name, physical address, or social security information), legislation like the Americans with Disability Act (ADA), Children’s Online Protection Act (CIPA), and more mandate privacy policies according to these Federal Trade Commission guidelines.

From our experience, while every business and proposition is unique, businesses should consider the following broad issues when either self-drafting or having an attorney draft the Terms of Use:

  • Privacy policy (if collecting personally identifying information)
  • How the user accepts the Terms of Use
  • Account security
  • Intellectual property rights (trademarks, copyrights, licenses)
  • User-posted content and content standards
  • Infringement
  • Social media integration

For more information or guidance on your online business practices, or if you are ready to prepare a terms of use and privacy policy, please call our office at (323) 543-4453 to schedule a consultation and speak with our savvy attorneys.

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