Trademark: The Good, the Bad, and the Ugly

For those that have been following along, I’ve made the distinction between the significance of a Trademark and a Copyright. In shorthand, Trademarks protect the public’s “mental associations” with brands or brand recognition and Copyrights protect anything that can be formed, written, or recorded.

I’ve also briefly touched on the difference between a Good trademark and a Bad trademark. Good trademarks typically require a branding campaign to associate a random or fanciful word with its product (think “Google” in the early 1990s). A Bad trademark, by distinction, relies on a generic word to connect its services to its name: “Great Lawn Maintenance”. You can assume this company would do lawn work, and that they think it’s great, but they all think they’re great – so there’s no significance to the name and therefore no trademark protection. (They can’t stop everyone else from using that brand name in connection with law care.)

What I haven’t had the opportunity to talk about is the difference between a Good trademark lawsuit and the Bad trademark lawsuit. Fortunately, the Universe has aligned to provide me with an opportunity to demonstrate both! Thanks, Universe.

(And thanks to Techdirt  for the inspiration….
Tobacco Companies Using Trademark Claims To Try To Avoid Putting Warning Labels On Cigarettes & Cigars  from the your-health-is-less-important-than-someone’s-trademark dept)

First: The Good
Infringement lawsuits over trademarks are started because Company B is using a trademark that is confusingly similar (and thus would cause a “likeliness of confusion”) or even identical (“passing off”) to Company A’s trademark. As a bit of a background, Company A is has usually done a lot of work building a successful brand and has become nominally famous for what they do. This, then, makes it enticing for the people running Company B to try and bleed away some of that fame. They could either do this by working hard and competing, or by knocking off Company A’s logo so that consumers get confused when they see Company A and Company B side by side, and buy Company B’s product, thinking it is from Company A. So while we’d like for Company B to help stimulate the economy with some old fashioned competition, that wouldn’t make for a good trademark lawsuit example. Instead, we get the latter version of the story where Company A finds out about what Company B is doing, and they go through the Angry Letter (Cease and Desist) and Lawsuit (Infringement Lawsuit / Injunction) dance. Company B usually tries to prove it’s actually competing, and while in court the lawyers have to do market research (the only actual evidence of a consumer’s mental association) and it’s a whole, long song and dance. Welcome to good, old fashioned Trademark law.

I could also wax poetic about the new up-surgance in trademark law regarding pre-registration of other people’s domain names (or “cyber squatting”) so Company A has to pay you big money to get a website – but the legal community at large knows about that stuff now. Even business people know that now, so much so that at the recent Firm Future conference I attended in Boston had seminar leaders mentioning that, even if you don’t have a web presence, you should buy www.YourName.comand register a Facebook, Twitter, and anything else your field uses.

So that’s old hat for bleeding edge Trademark law. Instead, what you want is International Trademark law that has global economy and treaties and foreign laws and all sorts of other nonsense to play with. Something like…

How Trademark Law Is Supposed To Work: Groupon Sues Australian Clone That Tried To Squat Groupon Name  from the likelihood-of-confusion dept

“Not only did it register, it also registered its company name as Groupon Pty Limited and applied for the trademark on Groupon in Australia. That seems like a clear case of a company trying to confuse the public into believing it’s the original Groupon, and a perfectly reasonable situation for using trademark law.”

Hooray for reasonableness! Now, hopefully for Groupon, the courts will agree. More than likely, though, is that Scoupon will stop infringing and settle out of court, so this may be the only thing we hear about it. If it isn’t, though, I’ll be sure to follow up with further developments.

Now: The Bad… 
When Bad trademark lawsuits appear, it’s usually someone trying to stretch a protection into a right. Case in point, some people can think that because they have “Company X” registered with the USPTO (US Patent and Trademark Office) that means that they also have a Right to and can demand that Some Guy who has had it registered for years must give it to me for little or no charge. (This is also a reaction to the effects of cyber squatting laws making it seem okay to bully people out of their legit domains because some squatters quite successfully bullied legit companies out of money – and that was just wrong. So charging at all is now wrong, etc.)

A Bad trademark lawsuit can also appear, however, when people try to use their right to a Trademark (again, governmental protection and remedy given to maintain a mental association of a product and a source) to skirt or fight against other government regulations – this time with health warnings.

Some background:

Legal obstacles raised against plain cigarette packs

“IP (Intellectual Property) Australia has advised the federal government that the plain packaging measure ”may not be consistent with Australia’s intellectual property treaty obligations” … “One of the briefing documents said that implementation of plain packs in Australia raised controversial treaty and trade issues concerning the use of trademarks which could violate provisions dealing with ”unjustified encumbrances” and undermine a trader’s ability to distinguish their good or services from other products.” (Emphasis added.)

Okay, this makes sense. A plain package means, essentially, no Trademarks can be used to distinguish one source from another. If it passes, the article notes that the tobacco industry folks there then want to be compensated for a “taking” (or an Australian “acquisition”) like when the government wants to build a highway through your back yard and you get paid for the property as you are forced to move. But:

“Experts in intellectual property law have… pointed out that international agreements and trademark laws protect trademarks and prevent third parties using them – but don’t guarantee a right to their unlimited use.’

Remind you of anything? Maybe Companies feeling like they have a right to domain names? Trademarks are a funny thing to begin with, but they are something that the government acknowledges and protects – not something they government (ANY government) can’t overrule. If Australia wants to ban packaging as a way to eliminate the “last way for cigarette companies to advertise their products,” then I suspect they’re going to have their way – American treaties or not.

And then, The Ugly:
In similar news, it seems that the Australian tobacco companies are fighting a two front war with their Trademark as the main weapon. In this one, though, the Australian company (British American Tobacco) WON the right to pursue damages against an importer (Trojan) for trademark infringement because the health warning Trojan is required to put on the tobacco products “covering up” the BAT trademark.

Tobacco giant fuming over packets
The Daily Telegraph 

“World tobacco giant British American Tobacco has won permission to pursue damages in the Australian courts, accusing local importer Trojan of infringing its Captain Black cigar trademark by covering its labels with the mandatory health warnings.”

This is a Bad trademark lawsuit because they’re using the trademark as a way to attempt to get the vividly graphic health warning off of the packaging. (Arguably because the health warnings are so effective.) While there is something to be said for BAT about the right to have their Trademark visible, what damages are there really? Put the image on the back of the package? Unfortunately I don’t know enough about the Australian requirements – but with an educated guess I would suspect BAT is going to try to “protect” not only the Trademark in their logo, but their “Trade dress” as well. Trade dress being the color of the box, placement of lines, etc. If the warning has to be face-pout on shelves, then it’s a problem. But if it has to be on the front, with the logo, then maybe they have something?

With such a big warning required, so big in fact that the “only place to put it” is over the logo (arguably a Trojan defense), then how will anyone know what brand it is (BAT’s damages). If Trojan could have put it somewhere else, then fine, but if not- won’t it basically amount to the packaging looking like it’s just a plain box? Warning logo on one side, logo on the other? Not that Australia would do anything like that…

From my perspective as an IP attorney, I’m definitely curious to see what happens in this one.

As for this blog – now you’ve had the opportunity to see both a good and bad trademark lawsuit in action. Lucky you!

Entertainer at Law, Esq.


(c) Nicole L. M. Jurkowski 2011


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