Trademark Infringement: The Basics
Author: Thomas Zuber

Trademark Infringement: The Basics
A trademark is an identifier-a "word, name, symbol,
device," or some combination thereof-that informs consumers
of the source of particular goods, distinguishing one
merchant's goods from those manufactured or sold by
another. 15 U.S.C. Section 1127. It may be associated
with a standard of quality, and it symbolizes the goodwill
built up in a product. The public relies on trademarks to
more efficiently evaluate options in a market that would
otherwise be riddled with uncertainty.

A problem arises, however, when an "infringer" creates or
uses a trademark that is identical or confusingly similar
to another's legally established mark. This is known as
"palming off" or "passing off," and historically the courts
were concerned because such infringement was considered a
morally reprehensible act – the focus was accordingly on
the improper intent of the defendant. 4 McCarthy on
Trademarks and Unfair Competition Section 25:1 (4th ed.).
Today, given the enormous breadth of the marketplace, bad
faith is often absent when someone concocts a near-copycat
identifier to help market her goods. In keeping with this
growth of the marketplace, the law has evolved and now
focuses on the effect on the public. Today, the concern
with the use of an infringing mark is that the public in
the relevant market may be misled or deceived as to the
origin of a good, and the value of the goodwill built up in
the mark may be diminished. If use of a similar identifier
is thus likely to confuse or deceive the public, then a
trademark owner may have a claim for "infringement." 15
U.S.C. Sections 1114, 1125(a).

This article introduces the basic elements of a federal
cause of action for infringement of registered and
unregistered trademarks – though the principles apply
equally to a claim for infringement of a service mark. See
American Int'l Group, Inc. v. American Int'l Bank, 926 F.2d
829, 830 n. 1 (9th Cir.1991). (A service mark serves the
same function as a trademark, but for services rather than
goods, and it is entitled to the same protection as is a
trademark.) A related federal claim for trademark
"dilution" may also be available if use of a nearly
identical mark is likely to lessen or "dilute" the goodwill
value built up in a famous mark. [Author's Note: Dilution
will be discussed in a future article.]

Elements of a Federal Infringement Claim The U.S. Congress
has crafted a series of rules to protect trademarks from
counterfeiting, infringement and dilution. These are
embodied in the Lanham Act, codified at 15 U.S.C. Sections
1051, et seq. The Lanham Act was written to unify
pre-existing federal law – both legislative and court-made
– on trademarks to eliminate conflicts and to make
ferreting out and stopping infringement fast and effective.

The federal civil cause of action for trademark
infringement is provided for in Sections 32 and 43(a) of
the Lanham Act. 15 U.S.C. Sections 1114 and 1125(a)(2002).
Section 32 lays out the requirements and remedies for a
claim of infringement of a registered mark. Section 43(a),
technically, lays out a claim for "unfair competition." It
has been read, however, to permit a like infringement claim
by the owner of an unregistered, but substantively valid,
mark. Two Pesos v. Taco Cabana, 505 U.S. 763, 768, 112 S.
Ct. 275, 120 L. Ed. 2d 615, (1992) (Section 43(a)
"'prohibits a broader range of practices than does Section
32', which applies to registered marks…but it is common
ground that Section 43(a) protects qualifying unregistered
trademarks….") (citation omitted).

To prove infringement of a mark pursuant to the Lanham Act,
a claimant must demonstrate the following:

1. it owns a valid mark mark, i.e., the mark, registered
or not, is entitled to protection;

2. the defendant is using the mark, or a confusingly
similar mark, in commerce;

3. without permission;

4. the defendant's use of the mark in commerce is likely
to cause confusion, mistake or deception as to who actually
is the source of either the plaintiff's or the defendant's
products; and

5. the defendant has no valid defense.

15 U.S.C. Section 1114(a); and see, e.g., Two Pesos v. Taco
Cabana, 505 U.S. at 768; GoTo.com, Inc. v. Walt Disney Co.,
202 F.3d 1199, 1205 (9th Cir. 2000).

Someone whose mark has been infringed may also have claims
for unfair competition under the Lanham Act (15 U.S.C.
Section 1125(b)), or for state statutory or common law
infringement – and in practice these claims are often
raised together. State legislation and common law rules
protecting from infringement generally offer similar
protections and remedies and require similar proof as does
the federal law. See e.g., Don Alvarado Co. v. Porganan,
203 Cal. App. 2d 377, 382 (Cal. Ct. App. 1962) (under
California unfair competition and trademark law, "it is
enough that an appreciable number of purchasers are likely
to be…misled" by a "confusingly similar" mark); Mattel,
Inc. v. MCA Records, Inc., 28 F.Supp.2d 1120, 1144 n. 30
(C.D.Cal.1998) (citations omitted), aff'd, 296 F.3d 894
(9th Cir.2002), cert. denied, 537 U.S. 1171, 123 S.Ct. 993,
154 L.Ed.2d 912 (2003) (to establish a state law trademark
infringement or state law unfair competition claim, the
plaintiff must meet the "likelihood of confusion" test
applicable in federal trademark infringement claims).

Ownership of the Mark A valid mark is the sine qua non of
any infringement case. KP Permanent Make-Up, Inc. v.
Lasting Impression I, Inc., 408 F.3d 596, 602 (9th Cir.
2005) (setting forth that "[b]efore infringement can be
shown, the trademark holder must demonstrate that it owns a
valid mark, and thus a protectable interest"). Under the
Lanham Act, a mark's validity can be proved by evidence
that it: (1) is registered, or (2) is eligible for
registration based on its nature and prior use.

Validity Based on Registration Registration of a mark
creates a presumption that it is legitimate and eligible
for protection under the Lanham Act. In courtroom
parlance, this means it is deemed "prima facie" evidence of
the "ownership" prong of the infringement test. 15 U.S.C.
Section 1065. The federal Certificate of Registration will
establish the validity of the mark, its registration, and
the registrant's ownership and exclusive right to use the
mark in commerce. 15 U.S.C. Sections 1057(b) and 1115(a).

Even when a plaintiff has proved that it registered a mark,
however, the defendant may still challenge the registrant's
supremacy by pointing up a defect in the registration or by
raising another objection, or "affirmative defense." This
might include a charge that the registration was obtained
fraudulently. Or, that the allegedly infringing mark was
the first mark to be legally "used," at least in a
particular region. 15 U.S.C. Section 1115(b) (listing
eight categories of defenses to the presumption created by
the fact of plaintiff's registration).

Protectability of an Unregistered Mark The foundation of
trademark protection historically is that someone gains an
interest in a trademark because he uses that mark, not
because he registers it with the federal government.
Sengoku Works v. RMC Int'l, 96 F.3d 1217, 1219 (9th Cir.
1996). The Lanham Act thus ensures that an unregistered
mark can also be protected against infringement. But a
plaintiff seeking to establish that her unregistered mark
has been infringed is not given the benefit of a
presumption in her favor, and so faces a tougher battle.
Before she can even claim her mark was infringed, an
unregistered mark holder must first prove, by a
preponderance of the evidence, (1) that her mark was
actually "used" in commerce and (2) that it meets the
general requirements of being a trademark under Section 2
of the Lanham Act. E.g., Two Pesos v. Taco Cabana, 505
U.S. at 768.

Proving "use in commerce" is straight-forward. The "use"
need not be nationwide – interstate use is sufficient to
bring the mark within the ambit of federal protection.
CarX Subx Service Systems, Inc. v. Exxon Corp., 215
U.S.P.Q. 345, 350 (T.T.A.B. 1982). Indeed, as one
commentator has suggested, given the nature of today's
marketplace there is almost no use of a mark that could not
be viewed as being "in commerce." 4 McCarthy on Trademarks
and Unfair Competition Section 25:57 (4th ed.) The use
must be more than a token use, though. The linchpin is
whether it was commercial use "of the type common to the
particular industry in question." Chance v. Pac-Tel
Teletrac Inc., 242 F.3d 1151, 1157 (9th Cir. 2001). For an
unregistered mark to satisfy the second prong of the test –
that it rises to the same level of validity of a registered
mark – a plaintiff must prove that the mark can, in fact,
distinguish its product from another's product.
Identifiers that are simply geographic designations,
surnames, descriptive terms, grade or style designations
cannot alone distinguish one source of goods from another,
and so do not fit the bill. This means that a mark must
either be "inherently distinctive" or, if merely
descriptive, have acquired "secondary meaning" in the
market. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S.
205, 210-211, 120 S. Ct. 1339, 146 L. Ed. 2d 182 (2000).

The Second Circuit developed the classic test courts use to
determine whether a mark – particularly a word mark – is
"inherently distinctive." Under this test, a mark that is
"`arbitrary' (`Camel' cigarettes), `fanciful' (`Kodak'
film), or even merely `suggestive' (`Tide' laundry
detergent)" rises to the level of a trademark. Abercrombie
& Fitch Co. v. Hunting World, Inc., 537 F.2d 4, 10-11 (2d
Cir. 1976).

Whether a descriptive identifier has acquired "secondary
meaning" and become a trademark depends on how the public
perceives it. A mark has acquired "secondary meaning" when
the public believes that the mark's "primary
significance…is to identify the source of the product
rather than the product itself." Inwood Laboratories, Inc.
v. Ives Laboratories, Inc., 456 U.S. 844, 851, n. 11, 72 L.
Ed. 2d 606, 102 S. Ct. 2182 (1982) (emphasis added).

A "Likelihood of Confusion" by the Buying Public The crux
of a claim for trademark infringement – and the
battleground on which most infringement disputes are fought
– is whether there exists a "likelihood of confusion"
between two marks. See, e.g., GoTo.com, Inc. v. Walt
Disney Co., 202 F.3d 1199, 1205 (9th Cir. 2000); G. Leblanc
Corp. v. H. & A. Selmer, Inc., 310 F.2d 449, 457 (7th Cir.
1962).

Determining whether the public would likely be confused by
a second mark can be a tricky inquiry. As the United
States Supreme Court wrote more than a century ago:

What degree of resemblance is necessary to constitute an
infringement is incapable of exact definition, as
applicable to all cases. All that courts of justice can do,
in that regard, is to say that no trader can adopt a
trademark, so resembling that of another trader, as that
ordinary purchasers, buying with ordinary caution, are
likely to be misled.

McLean v. Fleming, 96 U.S. 245, 251, 24 L. Ed. 828, 1877
U.S. LEXIS 1659 (1877). What is clear is that a
"likelihood" of confusion must be something more than a
mere possibility – there must be something more like a
"probability" of confusion. Rodeo Collection, Ltd. v. West
Seventh, 812 F.2d 1215, 1217 (9th Cir.1987)."

To make it easier for courts to evaluate when an ordinary
purchaser would probably or likely be misled by a mark, the
federal courts have developed a multi-factored test. While
some circuits have articulated one more or fewer factors,
following are the most commonly cited factors:

1. The strength of the plaintiff's mark,

2. The degree of similarity of the marks, in sound,
appearance and meaning,

3. The degree of similarity of the products,

4. Whether the products are actually competitive, or the
degree to which they overlap in trade channels and
territories,

5. The relative sophistication of the buyers, or the
likely degree of purchaser care,

6. The intent or good faith of the defendant's creation or
use of the mark, i.e., did the defendant intend to palm off
his goods as if they were the plaintiff's;

7. Evidence of actual confusion.

See, e.g., AFM, Inc. v. Sleekcraft Boats, 599 F.2d 341,
348-349 (9th Cir. 1979); Sullivan v. CBS Corp., 385 F.3d
772, 776 (7th Cir. 2004); Polaroid Corp. v. Polarad Elecs.
Corp., 287 F.2d 492, 495 (2d Cir. 1961).

This test is fluid. The plaintiff need not prove every
single factor, or even a majority of them, if a strong
showing is made with respect to some. See Dreamwerks Prod.
Group, Inc. v. SKG Studio, 142 F.3d 1127, 1129-30, 1132
(9th Cir.1998) (allowing case to proceed to trial where
plaintiff overwhelmingly satisfied only three of these
factors). In other words, as the Ninth Circuit aptly put
it, "we do not count beans." Id., 142 F.3d at 1132. So,
for example, if the holder's mark is weak, but the two
marks are quite similar and the goods closely related, a
court will still find infringement. AMF, Inc. v.
Sleekcraft Boats, 599 F.2d 341, 350 (9th Cir. 1979)
(discussing breadth of each factor).

Of course, some factors – for example, the similarity of
the marks and whether the services directly compete – may
weigh more heavily than others. Dreamwerks, 142 F.3d at
1130-32. Indeed, evidence of intent alone can conclusively
decide the question of "likely confusion." That is, if
there is evidence that the defendant knowingly created or
used a confusing mark to pass off an inferior good for a
superior one, the courts will presume that she could
accomplish her purpose and deceive the public.
Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1149 (9th
Cir. 2002) ("the alleged infringer's judgment as to what is
likely to be confusing is relevant because it may well be
accurate") (citations omitted). This is the closest
scenario to the traditional tort of "palming off." The
classic example is the Coca-Cola(r) cases, in which a
restaurant substitutes another product in response to a
request for Coke(r) or Coca-Cola(r) . 4 McCarthy on Trademarks
and Unfair Competition Section 25:3 (4th ed.) (compiling
cases).

Reverse Confusion Someone whose mark has suffered from
so-called "reverse confusion" is equally eligible for
trademark protection. "Reverse confusion" happens when a
small business, that has been using a mark on a relatively
small scale, is effectively beaten out of its market when a
much larger business subsequently begins using a similar
mark – on a large scale. If the public comes to believe
that plaintiff's product originates with the defendant, the
plaintiff has a cause of action for ''reverse'' confusion.
See, e.g., Patsy's Brand, Inc. v. I.O.B. Realty, Inc., 317
F.3d 209 (2d Cir. 2003), "Reverse Confusion Doctrine Under
Lanham Trademark Act," 187 A.L.R. Fed. 271 (2003).

Lack of Permission Someone cannot prohibit a use of her
mark that she expressly condoned. So, the Lanham Act
requires that infringement be found only when there was use
without the permission of the mark holder. For the most
part, this is a straight-forward inquiry.

Complications arise, though, when the defendant is a
licensee, franchisee or dealer who was, originally at
least, hired to produce or sell some goods with the
plaintiff's permission. The courts have viewed these cases
strictly, and generally find that any use of the mark that
exceeds the narrow scope of the original license
constitutes infringement. So, for example, what if a
license is silent on what to do with a surplus of a
product, and a franchisee sells surplus goods without
removing the owners mark? This constitutes infringement;
because a use that is not expressly provided for is
forbidden. 4 McCarthy on Trademarks and Unfair Competition
Section 25:30 (4th ed.)(citations omitted). Likewise,
continued use of a mark after a license expires – "holding
over" – is infringement. As the Eleventh Circuit put it:
"Common sense compels the conclusion that a strong risk of
consumer confusion arises when a terminated franchisee
continues to use the former franchisor's trademarks."
Burger King Corp. v. Mason, 710 F.2d 1480 (11th Cir. 1983),
cert. denied, 465 U.S. 1102, 80 L. Ed. 2d 130, 104 S. Ct.
1599 (1984).

Creation or Use of the Deceptively Similar Mark The Lanham
Act provides that anyone who "uses" or "creates" an
infringing mark can be liable for infringement. 15 U.S.C.
Section 1114. This means that any member of the
manufacturing and distribution chain of an infringing
product can be sued for trademark infringement. Id.;
Restatement (Third) of Unfair Competition Section 26 (1995).

Someone who knowingly sells supplies to and assists another
in producing copycat goods is, of course, liable for
infringement. But even "innocent infringers" in the chain
can be liable. Innocent infringers are those who may have
simply manufactured, packaged, printed or labeled the goods
at the behest of someone else, without knowledge that
something about the item bore a confusing similarity to a
mark already in commerce. "The reason for this is clear:
if potential purchasers are confused, no amount of good
faith can make them less so." Fuji Photo Film v. Shinohara
Shoji Kabushiki Kaisha, 754 F.2d 591, 596 (5th Cir.1985),
reh'g denied, 761 F.2d 695.

The most commonly encountered "innocent infringer" is a
retailer, who has sold the goods at the behest of another,
without knowledge of a confusing similarity. It is no
defense that someone else created the mark, or made the
product that bears the infringing mark. Someone who sells
a product that bears an infringing mark is using it in
commerce and is liable for trademark infringement, even if
acting in good faith. Id. El Greco Leather Products Co.,
Inc. v. Shoe World, Inc., 806 F.2d 392, 396(2d Cir. 1986),
(defendant liable for infringement even though it was an
innocent retailer which purchased seemingly genuine goods
in good faith without any apparent knowledge of the fact
that the source of the goods was a private label
manufacturer whose authorization to put the trademark on
the goods had been revoked by the trademark proprietor);
Polo Fashions, Inc. v. Fernandez, 655 F. Supp. 664, 667
(D.P.R. 1987)(defendant retailer liable trademark
infringement though it made every effort to verify that
goods were not counterfeit, and upon learning they were
immediately withdrew its remaining stock from sale).

As the Lanham Act makes clear, though, in the case of an
innocent infringement, money damages may, in some cases, be
precluded and the plaintiff may be limited to an injunction
stopping future infringement. 15 U.S.C. Section 1114(2).
[Author's Note: Monetary damages and other remedies will be
discussed in a future article.]

**This article is for informational purposes only. This
article does not constitute legal advice, and no
attorney-client relationship exists between its reader and
Zuber & Taillieu LLP or any of its attorneys. If you seek
legal advice in a particular matter, you should seek the
counsel of a lawyer experienced in the relevant area of
law, rendered with the lawyer's full knowledge of the facts
relevant to such matter.

About the Author:

Jeffrey J. Zuber is a partner of Zuber & Taillieu LLP
(www.zuberlaw.com), where he specializes in intellectual
property litigation. He earned a J.D. from Indiana
University School of Law - Bloomington, and a B.S. in
environmental sciences from Rutgers University.