Set forth below is a highly-recommended recent white paper by INLEX, one of our European trademark associates, about differences between trademark law in Europe and the United States. Many thanks to Eric Schahl & Lou Marec of INLEX for this white paper. The INLEX website is at http://www.inlex.com.
Please call us if you have any questions.
|While trademark law follows the same logic across all countries, there are local specificities, and in particular differences between the American and European systems.
In the US and the EU, two different systems, in theory
At first glance, the European system seems very different. The European Union Intellectual Property Office (EUIPO) offers only a single procedure, based on a single mode of filing and a single regime. A trademark can be filed without any proof of use or even of immediate intention to exploit. Therefore, in order to avoid a third-party request for the lapse of the trademark registration, the trademark must never not be exploited for more than five consecutive years. No proof of exploitation of the trademark is required either at the time of filing, at the time of renewal of the trademark, or even during the registration process.
The necessary taking into account of European specificities
BONOBO vs BONOBOS Case: French-speaking company court of Brussels, November 21st, 2019
The American company BONOBOS INC. was blocked in its expansion into European market by the 2006 BONOBO trademark from the French group MAGELLAN.
The American company’s attempt to buy without exploiting, despite an ongoing dispute with its European opponent covering identical activities, ultimately backfired.
In 2011, HASBRO INC. filed an opposition against the DRINKOPOLY application by Kreativni on the basis of various earlier MONOPOLY trademarks and was successful.
In 2015, McDonalds opposed the registration of the Irish company Supermac’s trademark “Supermac’s”, claiming resemblance to its trademark “BIG MAC”.
E&J GALLO WINERY is the owner of the 1998 Community trademark “GALLO”, claiming the seniority of the French trademark registered in 1968 which has since been abandoned by the company.
In defense, the SCEV CHAMPAGNE GALLO raised the “retroactive” revocation of the expired French trademark and obtained the cancellation of the trademark for lack of use. The claim was therefore no longer valid, and the 1996 Community trademark was cancelled on the basis of the SCEV CHAMPAGNE GALLO’s corporate name ‘Gallo’, which had been in use since 1984.
The American and European systems, in practice similar
In the name of harmonization of the law, the “Trademark Package” reform of 2015 has, in particular, reinforced the requirement of proof of use in opposition proceedings. From now on, the opponent must be able to prove the use of the earlier trademark on which the opposition is based for each of the goods and services concerned. Such a provision thus obliges the applicant to limit his application to the goods and services he actually uses.
The strict assessment of the use of the trademark
The severe penalties for fraudulent conduct by trademark applicants
Eric SCHAHL & Lou MAREC
US Supreme Court Resolves Major Dispute in Trademark Law: Willfulness No Longer Required for an Award of Infringer’s Profits as Damages
For many years, there has been a dispute in the federal courts about what level of culpability by a trademark infringer was required to support an award of the infringer’s profits as damages. The courts in the Second, Eighth, Ninth, and Tenth Circuits required that a trademark owner show that the infringement was “willful” before the infringer’s profits earned from the infringement could be awarded as damages. In contrast, the law in the Third, Fourth, Fifth, Sixth, Seventh, and Eleventh Circuits was that the infringer’s willfulness could be considered in deciding whether to award profits as damages, but that willfulness was not a requirement for an award of profits.
On April 23, 2020, the United States Supreme Court issued its decision in Romag Fasterners, Inc. v. Fossil, Inc. by which it resolved the dispute among the circuits and held that willfulness is not a precondition to recovering a trademark infringer’s profits as damages. Critically, the Court did not completely discount the role of the infringer’s culpability in the damages analysis – the Court expressly stated that “a trademark defendant’s mental state is a highly important consideration in determining whether an award of profits is appropriate.”
The Supreme Court’s opinion in Romag can be found here: Romag Fasteners, Inc. v. Fossil, Inc., 590 U.S. __, No. 18 – 1233 (April 23, 2020).
It usually is the case in trademark infringement cases that it is difficult to prove the profits lost by the trademark owner as a result of an infringement. Consequently, prior to Romag, it often was difficult for a trademark owner to obtain damages in cases where the infringer did not act willfully.
While recovering profits-based damages in trademark infringement cases may continue to be challenging given the Supreme Court’s instruction that the infringer’s “mental state” still is an important consideration in the damages calculation, the Romag decision has removed a significant legal hurdle to an award of such damages. It will be interesting to see how the Romag decision affects the settlement value of trademark infringement cases and whether the decision results in an increase in the number of infringement actions filed since the cases now may have more value.
Readers may be surprised to learn how often we are consulted by clients who face the following predicament: an individual or group of people get together to start a business. Working out of a home, or a garage, or a small workspace, they create a product or come up with a service that they think they can sell and proceed through sheer will and hard work to get the product or service to a point where the product really takes off.
Sounds like a success story, right? And it is. But then what too often happens is problems arise. Infighting starts about who created what, who owns what rights and who is entitled to what payments. And of course competitors notice the success of the product or service and before long knock-offs start appearing.
To do as much as is possible to protect against the foregoing problems and other intellectual property issues, we offer the following tips:
- Protect your intellectual property before you do anything else – consult with an experienced intellectual property attorney who can help identify what intellectual property rights exist and how best to protect them. Make sure you budget sufficient funds for legal advice and intellectual property protection – it will be money well spent in the long run.
- Put agreements in place to define specifically who created what intellectual property, who owns what and who gets what payments – such agreements can include corporate shareholder agreements, LLC operating agreements, license agreements, and assignment agreements. Also address at the front end what will happen if one or more of the founders wants out or if the success of the business fades – it is important to consider at the front end what will happen to the business assets and intellectual property down the road. The key is everything must be in writing – do not rely on trust, handshake agreements, oral agreements or any non-written agreement!
- A non-disclosure/confidentiality agreement is essential and must be in place before you discuss your product with anyone – and this includes not only potential vendors, business partners, etc. but also visitors to the place of business, friends, etc. if any protected details of products or services will be disclosed.
- Make sure to protect ownership through appropriate agreements – all employees and independent contractors should execute appropriate assignment agreements and work made for hire agreements. This is especially important with respect to website design and maintenance, marketing activities, outside sales people, and customer lists. It bears repeating: everything must be in writing!
- Put appropriate agreements in place if others will use your intellectual property to make sure there is no question who owns what and what uses can be made of the intellectual property.
One of the most frequent questions we must address in our practice is what is the difference between business entity names, trademarks and domain names in terms of legal protection and intellectual property status. A recent article in Forbes Magazine (republished from an article in Entrepreneur Magazine) has a good discussion on this topic. The article can be found at this link: http://fortune.com/2016/07/05/domain-names-trademarks.
We highly recommend this article to gain insight on this important subject.
The Rules of Practice for the Trademark Trial and Appeal Board (TTAB) are changing effective January 14, 2017. The new rules will be applicable to all proceedings, including those filed before January 14, 2017 and pending on that date. The new rules will apply to inter partes proceedings (oppositions, cancellations, concurrent use) and ex parte appeal proceedings.
More information about the new rules can be found on the TTAB website at this link:
Launching A Website Or Commencing Advertising By Itself Is Not Sufficient Use In Commerce Of A Service Mark
Trademark owners often mistakenly assume that they merely have to put up a website or commence advertising to gain trademark rights in a service mark used on the website or in the advertising. By its March 2015 decision in Couture v. Playdom, Inc., the Federal Circuit Court of Appeals confirmed that such activity, without actually providing the services offering on the website or in the advertising, does not constitute sufficient trademark use.
In Couture, the Federal Circuit tackled the question of “whether the offering of a service, without the actual provision of a service, is sufficient to constitute use in commerce under Lanham Act§ 45, 15 U.S.C. § 1127.” Section 45 provides that a service mark is used in commerce “when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State” (emphasis added). Citing decisions in the Second, Fourth and Eighth Circuits, the Federal Circuit held that Section 45 requires the actual rendering of services for there to be use in commerce.
The Couture decision highlights what can happen when a trademark owner does not do sufficient strategic planning. The trademark owner in Couture filed its application in May 2008 and registration was granted in January 2009. The trademark owner’s application was under Section 1(a) of the Trademark Act (i.e. based on actual use) even though the trademark owner had only placed the service mark at issue on a website that was “under construction” at the time of the application and registration. The trademark owner did not actually begin rendering services until March 2010. Under such circumstances, the trademark owner could have better protected his trademark rights by filing an application under Section 1(b) of the Trademark Act based on an “intent to use.”
Make Sure There Is Evidence Of A Bona Fide Intent To Use Before Filing That Intent-To-Use Application!
In the recent case of MZ Berger & Co. v. Swatch AG, the US Court of Appeals for the Federal Circuit affirmed a decision by Trademark Trial and Appeal Board (TTAB) to sustain an opposition to MZ Berger’s intent-to-use application for the trademark “iWatch.” By way of background, an intent-to-use application allows an applicant to essentially reserve a trademark so long as it has a “bona fide intent to use” the trademark in the future. The issue that has arisen in numerous cases over the years is what exactly is required to establish the requisite bona fide intent to use.
In the MZ Berger case, the evidence showed that MZ Berger only had an “aspiration” to reserve trademark rights in the iWatch name in case in decided to develop an associated watch. MZ Berger had never sold watches before, and there was no evidence that MZ Berger had ever taken any steps towards developing a watch product. The Federal Circuit therefore concluded that there was no evidence of a bona fide intent-to-use the iWatch mark.
The take-away from the MZ Berger case is that a mere subjective intent to use a trademark in the future is not a sufficient basis to establish a bona fide intent to use. Instead, if an intent-to-use application is challenged, the applicant must be able to produce objective evidence showing that concrete steps had been taken as of the date the application was filed to start commercializing the product or service to be marketed and sold using the proposed mark.
The Washington Redskins’ ongoing battle to try to preserve its’ “Redskins” trademark was dealt a serious blow, and Washington appears to be at grave risk of losing its trademark rights in the iconic team name, because of a federal court decision issued today.
Several years ago, a Native American named Amanda Blackhorse commenced an administrative proceeding with the litigation branch of the United States Patent and Trademark Office called the Trademark Trial and Appeal Board (TTAB), by which Ms. Blackhorse challenged the Redskins trademark. In June 2014, the TTAB ruling in favor of Ms. Blackhorse and cancelled six Redskins trademarks owned by the Washington team, finding that Washington could not have trademark rights in the “Redskins” name because such name was offensive and disparaging.
Washington appealed the TTAB ruling. On July 8, 2015, a federal district judge in Virgina upheld the TTAB decision. An article discussing the district judge’s decision can be found here: http://talkingpointsmemo.com/livewire/washington-redskins-mascot-trademarks-cancelled
Losing trademark rights in the “Redskins” name would be a huge problem for the Washington team. According to the Washington Post, Washington’s lawyers assessed the team’s value at $2.4 billion in August 2014, with $214 million tied to brand management and the Redskins brand. So an appeal from the district judge’s decision is likely if not inevitable. It should be noted that Washington lost trademark rights in the “Redskins” name in the Trademark Office in 1999, but was able to regain the rights through court litigation. So even though Washington is behind, the game is only in the third quarter and there still is a lot of litigation left – stay tuned!