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The Biggest Developments in Trademark Law Over the Past Year

Monday, September 16th, 2013

Posted on September 16, 2013.

Each year, I teach a seminar to other lawyers covering the most important developments in trademark law that occurred during the past year. I thought you might be interested in the key takeaways from this year’s presentation.

Generally speaking, a trademark is a distinctive name for a business, product or service.

#1. If you receive contractual permission to use someone else’s trademark in a business deal (for example, if you purchase a franchise for a business), can you be forced to stop using that trademark if the other party goes bankrupt?

Until now, the conventional wisdom was that bankruptcy could terminate your ability to keep using that trademark. A recent federal appeals court ruling created a split in the courts by holding that you should be able to continue using that trademark.

#2. If the schedule holds, a bunch of new generic top-level domain names (gTLDs in Net-speak) should begin launching later this year. This could provide many alternatives to familiar endings such as .com and .net.

If you own a registered trademark, you should enter it in the “Trademark Clearinghouse” that has been established to help protect trademark rights in the new gTLDs. I would get this done by mid-October.

#3. Generally speaking, two businesses can use the same name to sell the same goods or services if they operate in geographically separate markets − for example, if one is in Virginia, the other is in Texas, and each sells only in its local area.

But can either business claim dibs on advertising on the Internet, such that, if one party puts up a website or Facebook page, the other party must refrain from doing so? A federal trial court recently held there are no such dibs − each party can have an Internet presence.

Yet, if each party sells goods nationwide online, the early bird might get dibs.

#4. A federal trial court recently permitted a maker of famous luxury goods to sue in one lawsuit hundreds of cybersquatters – people who had registered domain names that mimicked the goods maker’s trademarks. In this sort of situation, often the domain names are used to run websites selling counterfeit goods.

Usually you have to sue each cybersquatter separately unless you can show a connection between them. Could this be an economical approach to dealing with mass cyberpiracy?

#5. If you own a trademark, can you use trademark law to stop someone else from using the words that constitute your trademark (or highly similar words) if the target’s usage does not itself serve as a source indicator, which is what a trademark does?

For example, suppose you own a trademark for a marketing slogan, such as the Wheaties slogan “The Breakfast of Champions.” What if a rival cereal maker states in the body text a print advertisement that its cereal “has been the breakfast of champions for over two decades”?

A federal appellate court recently held that, in theory, trademark law can prohibit such uses of your trademark, but you’ll have to show that the target’s use is likely to confuse consumers as to whether you and the target are associated.

#6. A federal appeals court recently held unconditionally that you can purchase your competitor’s trademark to be the trigger term for a Google AdWords ad, as long as you don’t use your competitor’s trademark in the body of your ad. (Try entering a popular product name in Google and you’ll probably see examples of AdWords ads at the top and/or right side of the search results.) This case might end the debate about whether this practice is legal.

#7. If you sue someone (or threaten to sue) for infringing on your intellectual property right (such as your trademark, patent or copyright), and if the defendant sues back claiming your intellectual property right should be declared invalid for some reason, can you get out of the suit by giving a written promise that you’ll drop the suit and not sue that defendant ever again over the same issue? In other words, can you end the attack on the validity of your intellectual property with such a promise?

The Supreme Court held that, in theory, you can, but it has to be clear that the target’s business plans don’t create a foreseeable risk of another infringement lawsuit against the target.

Written on September 16, 2013
by John B. Farmer
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