Tag: acquired distinctiveness

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Five Years: Most Relevant Time Period for Considering Third Party Trademark Use, Federal Circuit Says

Converse filed a complaint at the International Trade Commission (ITC) seeking an order blocking the importation of several shoes that Converse alleged to infringe Converse’s trade dress rights in three design elements on the mid-sole of Converse’s All Star shoes.

Converse asserted trade dress rights in the “design of the two stripes on the midsole of the shoe, the design of the toe cap, the design of the multi-layered toe bumper featuring diamonds and line patterns, and the relative position of these elements to each other.”

Here, the design elements of the shoe are product design trade dress, for which the owner must show that these design elements have acquired distinctiveness in the relevant market place. If the owner fails to show acquired distinctiveness, then it does not have trademark rights to enforce.

Third party use of a mark is relevant to whether a trademark has acquired distinctiveness in the relevant market place. If many third parties use a mark, then it is less likely that this mark will be recognized in the marketplace as associated with one source of goods or services.

The defendants in the ITC proceeding asserted that the design elements had not acquired distinctiveness. They relied, in part, on evidence of third party designs. Some of those third party design usages were old.

The Federal Circuit said that the ITC erred by too heavily relying on prior uses long predating the first infringing uses and the date of registration in Converse, Inc. v. ITC, No. 2016-2467 (Fed. Cir. 2018). The court relied on Section 2(f) of the Lanham Act to find that the five year period prior to the relevant date was the most relevant time frame to consider third party use.

Generally a trademark owner must show acquired distinctiveness prior to the date when the first alleged infringement occurred by the other party. Therefore, the first use by the the other party is generally the relevant date (or the date of  registration, if a trademark registration is at issue).

The court said that “Consumers are more likely to remember and be impacted in their perceptions by third-party uses within five year and less likely with respect to older uses.” It continued that “uses older than five years should only be considered relevant if there is evidence that such uses were likely to have impacted consumers’ perceptions of the mark as of the relevant date.”

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Protecting Descriptive Marks: Principal Register and Supplemental Register

The USPTO maintains two registers of trademarks. The main register is the principal register while the other is the supplemental register. Most trademark applications seek registration on the principal register. Registration on the principal register provides the trademark owner with more rights and benefits than the supplemental register.

Principal Register

The advantages of owning a registration on the Principal Register, include that the registration on the Principal Register:

  • Provides exclusive nationwide right to use the mark in commerce on or in connection with the goods/services listed in the registration where there was no prior use by others (15 U.S.C. §§ 1057(b), 1115(a));
  • Is constructive notice to the public of the registrant’s claim of ownership of the mark (15 U.S.C. §1072);
  • Provides a legal presumption of the registrant’s ownership of the mark (15 U.S.C. §1057(b)),
  • Operates to provide a constructive use of the mark as of the filing date of the application that results in the registration (15 U.S.C.  §1057(c));
  • Enables the owner the ability obtain the assistance of the US Customs and Boarder Protection to prevent importation of infringing foreign goods (15 U.S.C. §1124);
  • Enables the option for registrant’s exclusive right to use a mark in commerce on or in connection with the goods or services covered by the registration to become “incontestable,” subject to certain exceptions (15 U.S.C. §§1065, 1115(b) );
  • Provides a basis for using a simplified process under the Madrid Protocol to a obtain trademark registrations in foreign countries. (15 U.S.C. §1141b).
  • Operates as a defense to state or common law claims of trademark dilution. (15 U.S.C. § 1125(c)(6)).

The Supreme Court said “Federal registration …. confers important legal rights and benefits on trademark owners who register their marks.” The Federal Circuit Court of Appeals said, “These benefits [of a federal trademark registration]—unavailable in the absence of federal registration—are numerous, and include both substantive and procedural rights.” So if you are serious about protecting your mark, you want to register it on the principal register.

Supplemental Register

However, when a trademark does not qualify for registration on the principal register, the supplemental register is a fall-back option. A trademark may not qualify for registration on the principal register if it is merely descriptive in relation to the goods/services and has not acquired distinctiveness, i.e. recognition in the relevant marketplace as a trademark. A mark is merely descriptive if it describes an ingredient, quality, characteristic, function, feature, purpose or use of the corresponding goods or services.

Therefore, an applicant may seek registration on the supplemental register when its mark is merely descriptive and has not acquired recognition in the marketplace as a trademark. Further, an applicant might seek registration on the supplemental register if the mark has been refused on the principal register as merely descriptive and the applicant does not want to undertake the effort to attempt to prove to the USPTO that the mark has acquired recognition in the marketplace as a trademark.

The advantages of owning a registration on the Supplemental Register, include that the registration:

  1. Allows the registrant to use the registration symbol ®;
  2. May block the registration of a confusingly similar mark by a third party; and,
  3. Provides a basis for using a simplified process under the Madrid Protocol to a obtain trademark registrations in foreign countries.

The time period that a trademark has been use is one factor in determining whether a mark has acquired distinctiveness (and is thus register-able on the principal register). 15 U.S.C. §1052(f),  provides that “proof of substantially exclusive and continuous use” of a designation “as a mark by the applicant in commerce for the five years before the date on which the claim of distinctiveness is made” may be accepted as prima facie evidence that the mark has acquired distinctiveness. The USPTO is not required to accept 5 years of use as establishing acquired distinctiveness, but they can and often do.

Therefore, one strategy to protect a merely descriptive mark is to seek registration on the supplemental register. Then after a period of time, such as 5 years, the applicant can seek registration on the principal register and rely on section 1502(f) for establishing acquired distinctiveness. Before seeking registration on the principal register, the registration on the supplemental register has the chance of blocking others from registering the same or confusingly similar mark. It may also have the effect of deterring others from using the same or a confusingly similar mark.

Yet, reliance on 1502(f) this might not work if third parties start using the mark for the same goods in the marketplace before 5 years of use. Then the applicant might not be able to say that its use was “substantially exclusive.” Nevertheless, the applicant could still attempt to prove acquired distinctiveness through other evidence.

Choosing a descriptive mark tends to put the applicant at a disadvantage in terms of trademark strength, at least initially. However, overtime if competitors do not use the mark, the mark might acquire trademark protection if the appropriate steps are taken. Seeking registration on the supplemental register is one step that may help in the process.

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$200M in Annual Sales Under Highly Descriptive Mark Insufficient to Establish Trademark Rights

When you have a highly descriptive mark, even hundreds of millions of dollars in annual sales under the mark may not be enough to establish trademark rights.

magnestiaMagnesita Refractories Company (MRC) applied to register the mark MAGNESITA in two trademark applications for refractory products in class 19 and for online services related to using refractory products in class 37.

The USPTO found that the mark was generic for refractory products in class 19, and the appeals court agreed in In re Magnesita Refractories Company, 2016-2345 (Fed. Cir. 2017).

The court also found that MRC failed to show that the mark acquired distinctiveness in connection with the class 37 services. A mark has acquired distinctiveness when “the primary significance of the term in the minds of the consuming public is not the product but the producer.” Stated another way, the mark needs to act as a source identifier and not be merely understood by the purchasing public as descriptive of the goods/services on which the mark is used.

The court noted that “If a term is highly descriptive, the applicant faces an elevated burden to show acquired distinctiveness.”

MRC submitted evidence showing that MRC (1) sold $100 million in refractory products under the MAGNESITA mark during half the 2010 year and (2) sold $200 million or more annually in refractory products under the MAGNESITA mark from 2011 to 2014. The USPTO TTAB recognized that these sales figures were substantial. Nevertheless, they were not sufficient to establish acquired distinctiveness.

MRC also submitted a declaration attesting to exclusive and continuous use of the mark since 2008. This too what not sufficient to establish rights in the mark.

The court found that MRC should have submitted evidence demonstrating how the public perceived MAGNESITA as source indicating. Such evidence is usually in the form of a trademark survey and/or direct testimony of customers. But surveys are expensive to conduct, which is probably why MRC didn’t conduct one. Also, regarding direct testimony, companies are sometimes reluctant to bother their customers with requests for testimony and other help in legal proceedings.

Nevertheless, when you have a highly descriptive mark, even hundreds of millions of dollars in annual sales under the mark may not be enough to establish trademark rights. You will probably need to pay to have a trademark survey conducted. And, even that’s no guarantee. What if the results of the survey show that your mark is not recognized as source identifying by the relevant group of consumers?

Choosing a highly descriptive mark can be expensive, both in obtaining trademark protection and in defending the mark against attacks of others. Therefore, if you have the opportunity, you should consider choosing a stronger mark at the outset.