Trademark owners are now litigating more than ever to preserve their brand names and logos. They are taking aggressive stands with much success. Here are some recent examples.
Courts are enforcing the law of trademark infringement and trademark dilution to prevent unfair competition, a commercial tort designed to promote fair and honest competition. To preclude an action for trademark infringement, the mark, logo or design must not be “confusingly similar” to an existing mark, logo or design. A trademark is “confusingly similar” if it is likely to cause confusion amongst consumers as to the source of the product or service.
For example, In May 2011, Apple brought an infringement and dilution action against defendant Fei Lik Lam, a/k/a Phillip Lam for using the name whiteiphone4now.com. Apple’s complaint states “The Apple Logo and iPhone Trademark are distinctive, iconic and famous trademarks that are instantly recognized as indicating products and services created, designed, manufactured, produced and/or provided by Apple.” The court eventually found Lam’s domain name to be confusingly similar to Apple’s iphone in the sense that consumers may be confused that whiteiphone4now.com is part of Apple’s line of products.
In 2008, Adidas filed an infringement case against Payless Shoes Source; a subsidiary of Collective Brands Inc. The Federal Court found Payless’ sneakers with 2 and four parallel stripes infringed Adidas’ sneakers and assessed Payless damages of $304.6 million. The Payless victory empowered Adidas to sue any sneaker company that sells sneakers bearing two, three or four stripes. Indeed, federal court records show that Adidas has approximately 325 pending infringement cases in the United States and approximately 45 settlement agreements. Most recently, in March 2011, Adidas sued small footwear manufacturing company Radii in federal court in Oregon.
In another infringement case, Facebook Inc., sued Teachbook.com LLC for trademark infringement for its use of the “Teachbook” domain name. In its defense, Teachbook argued that the word “book” was generic and could not be claimed by Facebook as a trademark. The court was not persuaded and on Oct 26, 2011, it refused to dismiss Facebook’s complaint.
Similarly, businesses that dilute a famous mark may also be prevented from using their trademark. Trademark dilution refers to the concept where a trademark that is confusingly similar to a famous mark may not be used in a way that will lessen the uniqueness of the famous mark even though it may brand an entirely different product. That was one of the causes of action asserted by Apple in its case against whiteiphone4now.com discussed above. Foreign trademark law of dilution is very similar to that of the United States. For example, in November 2011, Lodha Garments in India was using the trademark ‘Cadbeery’. Cadbury UK Ltd. and the Indian subsidiary filed a suit in the Delhi High Court against Lodha Garments on the grounds of “adopting a deceptively identical name to promote its product.” The Delhi High Court granted an injunction against Lodha Garments. Here, the garment factory in India was not producing chocolates so as to directly infringe Cadbury’s mark. However, they were diluting the famous mark ‘Cadbury’, renowned chocolate manufacturers, by using a similar name for garments.
New and start up businesses need to be wary of their choice of trademarks. A state and federal clearance search of the proposed mark is essential and consultation with a trademark attorney should be a high priority given the current climate and increase in trademark litigation.
— Ash Tankha, Esq.
