Protecting Unregistered Descriptive Trademarks in the Seventh Circuit: Acquired Distinctiveness

When attempting to enforce or assert an unregistered descriptive mark, a trademark owner generally needs to show acquired distinctiveness (a.k.a. secondary meaning). Why?

First, the default position is that merely descriptive terms are not likely to be seen as a source indicator (i.e. the function of a trademark) to consumers. Courts have described this in a number of ways including that descriptive terms “are a poor means of distinguishing one source of services from another.” M.B.H. Enters. v. Woky, Inc., 633 F.2d 50, 54 (7th Cir. 1980).

Second, when a merely descriptive term is not seen as a source indicator by customers, such terms should be available for use by competitors to describe their goods or services. Id.

However, a merely descriptive term can become protectable when the relevant purchasing public comes to recognize the term as a source indicator rather than merely descriptive. Therefore, a term has acquired distinctiveness (or secondary meaning) were consumers think of the term not as descriptive, but as the name of the product or service. Packman v. Chi. Tribune Co., 267 F.3d 628, 638 (7th Cir. 2001).

Stated another way, acquired distinctiveness is found where there is “a mental association in the buyers’ minds between the alleged mark and a single source of the product [or service].” Echo Travel, Inc. v. Travel Assocs., 870 F.2d 1264, 1266 (7th Cir. 1989).

How do we know when this mental association exists? Courts in the Seventh Circuit consider a number of acquired distinctiveness factors, including:

  • (a) direct consumer testimony;
  • (b) consumer surveys;
  • (c) exclusivity, length, and manner of use;
  • (d) amount and manner of advertising;
  • (e) amount of sales and number of customers;
  • (f) established place in the market; and,
  • (g) proof of intentional copying.

[Echo Travel, Inc. v. Travel Assocs., 870 F.2d 1264, 1267 (7th Cir. 1989); Baig v. Coca-Cola Co., 607 F. App’x 557, 560 (7th Cir. 2015).]

Factors (a) and (b) are considered direct evidence while the remaining factors are circumstantial evidence. Direct evidence involves asking customers whether they recognize the term at issue as a source of a product and recording the results.

The factors concerning circumstantial evidence consider facts that could indicate the customers recognize the term as a source indicator. For example, long, exclusive and consistent use of a mark, under factor (c), weighs in favor of finding recognition. Further, a lot of advertising, sales, customers, and a prominent place in the market leans, under factors (d), (e), and (f), weights in favor of finding recognition.

For example, in the Echo Travel case, the court found that the plaintiff Echo Travel did not show acquired distinctiveness in a picture-mark, comprising a beach scene. Echo provided no admissible direct consumer evidence and no survey. The length of use of the picture-mark was one season comprising the fall of 1985 to the winter 1986, which did not weigh in favor of Echo. Echo’s advertising of 25,000 posters at 200 campuses was some evidence, but not enough where the court characterized it as providing “little probative light.”

Regarding sales, Echo ran 10,000 trips in Daytona Beach in the spring of 1986 resulting in about $2 million in sales. But the court criticized Echo for not providing its sales volumes prior to and after the 1985-86 season, and thus, “there is no way to measure whether the beach scene poster [mark] impacted its sales volume.” The court also found there was a lack of evidence that Echo has an establish place in the market and there was no proof of intentional copying.

In contrast, in Int’l Kennel Club of Chi., Inc. v. Mighty Star, Inc., 846 F.2d 1079, 1086-87 (7th Cir. 1988) the court found the plaintiff had shown a better than negligible chance of establishing secondary meaning in “International Kennel Club” sufficient for a preliminary injunction. While the plaintiff did not provide a survey, the court found that the amount and manner of advertising and the length and manner of use of the mark was sufficient. The plaintiff advertised in publications of interest to dog fanciers. It advertised in Chicago newspapers and magazines where its dogs shows are held. It mailed out mailings to its mailing list of 15,000 prior to each of its shows.

The plaintiff spent $60,000 in advertising and public relations expenses in its most recent fiscal year, representing 42 percent of the club’s expenses. Further it gained extensive free publicity. Moreover, it received letters and phone calls asking about defendant’s accused product, indicating that when dog fanciers see the “International Kennel Club” name, they think of the plaintiff. Last the plaintiff operated and used the International Kennel Club mark for over 50 years.

The requirement to show secondary meaning (acquired distinctiveness) for an unregistered descriptive mark is an additional burden (and expense) for a trademark owner. Consider the effort required put on evidence for each of the acquired distinctiveness factors above.

If the trademark owner is heavily invested in proceeding with a unregistered descriptive mark, it may need to bear that burden. But when choosing a mark, consider choosing a stronger mark to avoid the need to show acquired distinctiveness.

Know When to Stop Wasting Money on Trademark Litigation

MoneyWasteYou need to know when to stop wasting money on trademark litigation. Here is a case where the plaintiff should have stopped on day two of the lawsuit, but didn’t.

Dr. Tartell and Dr. Mandel jointly practiced medicine until 2011, when they split their practice and went separate ways. The break up was contentious.

After the break up, Dr. Mandrel (1) registered six domain names using some variation of Dr. Tartell’s name, redirecting some to Dr. Mandrel new website, and (2) purchased Google AdWords keyword for Dr. Tartell name, which caused Dr. Mandell’s website to appear as an advertisement whenever someone searched with those terms on Google.

Tartell filed suit against Dr. Mandell including claims for cybersquatting, false designation of origin, and unfair competition (all trademark law related claims).

The day after the suit was filed in 2012, Dr. Mandel canceled the domain names. Many trademark related disputes are resolved this way, e.g. with one party stopping or changing their name.

It is unclear whether the Adword purchases stopped. They probably did, but even if they did not, plaintiffs do not fare well in competitive keyword advertising suits.

So, the day after the suit was filed, Dr. Tartell probably got the best he could get, e.g. Dr. Mandell releasing the domain names and (probably) stopping the Google Adword buy. This was a good time to settle.

Litigating on Principle is Expensive and Often Unsatisfying

But the case continued for at least three years. It continued all the way through a four day bench trial and through an appeal in 2015. Why did this case continue? As stated by the trial court:

this action continued all the way through [a four-day bench] trial because Dr. Mandel refused to take responsibility for his antics while Dr. Tartell sought a statutory windfall for a short-lived and largely pointless deceit.

In other words, (1) Dr. Mandel would not apologize and (2) Dr. Tartell wanted statutory damages and attorneys fees as a result of the alleged cybersquating.

Pursuing litigation to achieve an apology or an an acknowledgment of wrong doing (litigating on principle) can be a very expensive undertaking with often unsatisfying results, as Dr. Tartell experienced here. Dr. Tartell won only $6000 at trial, much less than he likely paid his attorneys. But he would not keep even that amount. Dr. Tartell ultimately lost on appeal in Tartell v. South Florida Sinus and Allergy Center, Inc., No. 14-13178 (8th Cir. 2015). And it is a pretty safe bet that Dr. Mandel did not apologize to Dr. Tartell.

Short Use and Quick Turnover Kills Off Statutory Windfall

On the second issue, you need to carefully evaluate your likelihood of success in obtaining money damages, even when the other side’s actions appear willful and to reflect poorly on them. The statistical likelihood of receiving an award of any damages in trademark litigation is low.

Dr. Tartell may have been expecting closer to $600,000 in statutory damages and not the $6,000 that was awarded by the trial court. The Lanham Act provides for statutory damages of between $1,000 and $100,000 per domain name for cybersquatting. 15 U.S.C 1117(d). This case indicates that when the defendant carries on with the offending conduct only a short time and cancels or turns over the domains immediately after suit, the court could see this as a mitigating factor leading to an award of damages at the low end of the range and not the top, e.g 6 domain names * $1,000 = $6,000 and not 6 domain names * $100,000 = $600,000. This is true here even though Dr. Mandrel’s “antics” were in bad taste and, as the court noted, included “deceit.”

Difficulty in Protecting One’s Personal Name in Medicine

Dr. Tartell lost on appeal because he could not establish that his name was protectable. Therefore he could not recover any money damages. This result should have been predicted.

A quick reference to McCarthy on Trademarks reveals that “in professions where use of personal names as identifiers is traditional, a court may require a strong showing of secondary meaning.” McCarthy 13.2. Or as the Eighth Circuit Appeals Court stated, “in professions where use of personal names as identifiers is traditional such as the medical profession, it is more difficult to establish secondary meaning [in such personal names].” In other words, it is known that it is difficult to protect your personal name in the medical profession under trademark law.

In the Eighth Circuit, a plaintiff must prove that his service mark is “distinctive” to establish a claim for cybersquatting, false designation of origin, and unfair competition. So to obtain any relief, Dr. Tartell needed to prove that the consuming public recognized Dr. Tartell as the source of a service and not merely as a person’s name.

For example, “Ford” was a surname of Henry Ford, but overtime through sales and advertising “Ford” became associated in the minds of the consuming public with a car producing company and not merely the individual.

In the Eighth Circuit, a plaintiff can show a name is distinctive through consumer surveys or circumstantial evidence. Circumstantial evidence may include (1) the length and nature of name’s use, (2) the nature and extent of advertising and promotion of the name, (3) the efforts of the proprietor to promote a conscious connection between the name and the business, and (4) the degree of actual recognition by the public that the name designates the proprietor’s product or services.

Dr. Tartell provided no consumer surveys. Dr. Tartell presented evidence of his academic activities and reputation among other medical professionals. But this is not relevant because the target audience for such information was professionals and not the consumers of his medical services.

Dr. Tartell’s name used in advertisements for his business with Dr. Mandell before the split did not show Dr. Tartell’s name was distinctive because his name was not used prominently as a trademark in such advertising.

The appeals court ultimately found that Dr. Tartell did not establish any of the four distinctiveness factors. Therefore, Dr. Tartell lost and received no money damages. Dr. Tartell should have settled on the second day of his lawsuit.

Photo credit to flickr user Mike Poresky under this creative commons license.