Some intellectual property (IP) rights arise automatically under certain circumstances while others require affirmative action.
PRACTICAL TIP: Think about IP early to avoid waiving potential rights and consider the benefits of optional protections.
Copyrights
Copyright attaches automatically to the author when a new creative work (e.g., text, photo, etc.) is fixed in a tangible medium of expression. Registration is not required for copyright to exist. Copyright ownership is also independent of possession and ownership of a copy of a work—even the “original” or sole copy.
Trademarks
Trademark rights can arise through use of a mark to identify the source of goods or services, provided that the mark is distinctive. Registration is not required to have enforceable trademark rights in the U.S. However, registration of a mark, particularly a federal registration on the Principal Register, helps to secure rights through the entire country and over time can limit the possibility for others to challenge the trademark rights in the registration.
Trade Secrets
Trade secret rights can attach to information that derives economic value from not being generally known and not being readily ascertainable so long as you take reasonable measures to keep it secret, meaning the existence of trade secret rights depends on the affirmative steps you take to maintain secrecy.
Patents
Patent rights require applying for and then obtaining a patent following an examination to determine if the invention satisfies criteria for patentability, which include novelty and nonobviousness. In the U.S., a patent must be applied for within one year of any disclosure, public use, or commercialization of the invention by the inventor. In most other countries, a patent must be applied for before any public disclosure.
International Considerations
Patent and trademark rights are territorial and rights in the U.S. will generally not provide exclusive rights abroad. Copyright and trade secret rights may have international enforceability in both the U.S. and some foreign jurisdictions.
Assignments and Licenses
IP rights can also be obtained from others via assignment (i.e., a transfer of ownership) or licensing (i.e., authorization to use the IP without a transfer of ownership). For many types of IP, assignments must be in writing and/or satisfy other criteria to be valid. Trademark rights are tied to underlying customer goodwill and cannot be assigned apart from that goodwill. A “naked” assignment of a trademark without associated goodwill can result in abandonment, as can licensing without quality control.
Employee- and Vendor-Created IP and Joint Development
When employees create things that may be subject to IP rights, the general rule—with some exceptions (notably for copyrightable works made for hire created by an employee within the scope of his or her job duties)—is that the employee rather than the employer is the owner. Businesses wanting to obtain ownership of employee-created IP should consider a written agreement (e.g., employment agreement) that establishes either an obligation to assign IP (to be followed later by execution of an assignment) or a prospective assignment of expected future IP.
When hiring a vendor to create or develop something, or jointly developing something with a business partner, consider who will own the IP at the outset. Merely paying for development will not automatically result in the transfer of ownership of vendor-created IP. Joint development can raise complex questions about who will own what, and ownership of particular IP may depend on which person(s) or entity contributed to that particular subject matter in the absence of a written agreement.
A common mistake is to ignore ownership of IP rights until there is infringement or a big business deal. Attempting to “fix” or alter IP ownership after the fact is usually much more complicated than sorting that out from the start of a vendor/partner/employee relationship (or even at the start of a particular project).
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
Trademark law can protect a brand name (in words), graphical logo, or the like—a “mark”—used to identify the source of goods or services. But not all marks are protectable. It is not unusual for a first-choice mark (and second-choice…) to already be taken or simply not be protectable. The following is an explanation of the basics of how a business’ name and logo can be protected under trademark law.
The first step is to select a mark that is distinctive enough to be protectable. Generic terms (or functional aspects) are never entitled to protection under trademark law. Merely descriptive terms are not protectable but descriptive marks can potentially develop “secondary meaning” and acquire distinctiveness in consumers’ minds over time, through extensive use and promotion, so as to become protectable. Suggestive, arbitrary, or fanciful marks are inherently distinctive and thus always protectable. Arbitrary and fanciful marks have the greatest legal strength, in conceptual terms.
A common problem is that businesses select marks that are not conceptually strong enough to merit exclusive rights as trademarks. Businesses people are frequently drawn to descriptive or generic terms because they require less initial investment to obtain consumer recognition. But the tradeoff is that generic and descriptive marks are considered conceptually “weak” and offer less or no legal exclusivity. In this respect, business and marketing considerations can be in tension with legal considerations under trademark law. If exclusive trademark rights are important to your business, make sure you select a mark that is good enough in legal terms to be protectable under trademark law.
Keep in mind that a mark must be one specific thing. Materially different spellings or visual depictions potentially reflect use of different marks. It is possible to have multiple different marks that are each in use, potentially even simultaneously with the same goods or services. But consistency in usage is important. This generally means settling on the exact mark or marks that will be used and sticking to those decisions.
Secondly, trademark rights generally go to the senior user. This means many marks are already taken by others, which limits the universe of marks freely available for your business’ use at the time of adoption. If your business’ mark creates a likelihood of confusion with an existing mark, the prior user will have superior rights. There can be a likelihood of confusion even if there are differences between the respective marks or goods/services, and evidence of actual confusion in the market is not required. Also, a protectable but weak mark, such as one that resembles numerous other coexisting marks, will have more limited scope of exclusivity than a stronger mark.
Geographically separate but otherwise similar uses of trademarks can sometimes coexist. Although businesses operating on the Internet tend to encompass wide geographic areas of use without much opportunity for separation. Moreover, a prior user might consent to coexistence in some circumstances—often subject to certain conditions to avoid confusion, such as agreements limiting the scope of the goods/services with which a mark is used. But, in general, the possibility of coexistence or consent is very context-specific and cannot simply be assumed to be possible.
Trademark rights in the U.S. arise from commercial use of a mark. “Common law” rights can accrue automatically through use of a mark but are generally limited to the geographic area in which the mark is actually used. Registering a mark has benefits, and a federal registration on the Principal Register can secure rights over the entire country and can be used to prevent unauthorized importation of goods bearing the mark. Federal registration generally requires use in interstate commerce, territorial commerce, or foreign/tribal commerce (with a limited exception if a foreign registration exists).
Trademarks are also territorial. Rights in one country generally provide no exclusivity in another. But most countries have no use requirement; many follow a first-to-file system and may provide little or no rights based on use alone. Also, many other countries are more restrictive than the U.S. in terms of the level of distinctiveness required for a mark to be registrable.
After adoption of a mark, use it properly and consistently, and monitor for potential infringing uses. Additional steps can also be taken to enhance protection of a trademark.
Trademark rights can potentially last indefinitely if still in use but can be abandoned through nonuse without intention to resume. Federal rights are presumptively abandoned after three years of nonuse. A branding “refresh” or other changes to a mark may result in the loss of existing trademarks rights and/or registrations and be treated as the adoption of a new mark or marks. Moreover, reduction in the goods and services with which a mark is used can lead to partial abandonment (just as expansion of use can potentially lead to new infringement risks).
Useful Tips:
Use care when selecting a mark to avoid having to later re-brand, which becomes more burdensome over time. Identify and evaluate potentially conflicting existing marks as part of initial mark selection. In doing so, consider all jurisdictions and scenarios under which your business plans to operate, including likely future expansion as to goods/services and geographic areas. A trademark legal clearance can help identify potentially conflicting marks and associated infringement risks.
Registration of an Internet domain name, a corporate name (trade name), an assumed name (d/b/a), or even all of them, does not alone establish any exclusive rights in a brand or mark under trademark law.
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
The process to register a trademark (or service mark) involves submitting an application, which is then substantively examined and a registration is ultimately either issued or refused. Post-registration action is required to maintain a registration, which can potentially last indefinitely provided that the registered mark is still in use. Both federal and state trademark registrations are available in the USA, and registration is also available in foreign countries. In many jurisdictions, including for U.S. federal applications, marks are published for potential opposition by others prior to registration. Trademark registrations are also subject to cancellation (or expungement, etc.) under certain circumstances.
Federal registrations are handled by the U.S. Patent & Trademark Office (USPTO), which oversees two registers: the Principal Register and the Supplemental Register. Only registration on the Principal Register establishes a presumption of exclusive rights in a mark.
Not all Registrations are Equal in the U.S.: Federal trademark registration on the Principal Register is almost always preferable to state registration because much more expansive national rights are obtained, which is significant in the age of the Internet. Also keep in mind that a federal registration on the Supplemental Register does not by itself establish exclusive rights, although it can block a later conflicting registration. The value of state-level registrations varies. Some state trademark registrations provide no presumption of exclusive rights.
Basic Requirements of a Federal U.S. Trademark Application
A U.S. federal trademark application must identify the mark, the associated goods and/or services, and a filing basis.
Identification of Mark
The identification of the mark establishes what, exactly, constitutes the mark, which can include words (e.g., in “standard characters”) and/or graphical elements (e.g., color, stylized typeface/font, design element(s)), depending on the nature of the mark. Importantly, a mark must be one specific thing. Different spellings or different visual depictions potentially represent different marks. A trademark application must be limited to one mark, with any other potential marks pursued in separate applications.
Identification of Goods and Services
The goods and services must be identified and grouped according to a classification system, with filing fees calculated based on the number of classes of goods/services included. There is some skill involved in wording these identifications of goods and services appropriately. One important consideration is that for U.S. federal registrations it is not possible to simply “reserve” a mark, that is, merely to block others from using it. Use of the mark with all the identified goods and services must have already occurred or at least be intended in the future. Therefore, crafting a proper identification of goods and services requires first understanding how the applicant is currently using and/or legitimately intends to use the mark.
Filing Basis
As to filing bases, first, an application can be based on actual use in commerce, that is, the mark is already in use. Evidence of use in the form of a “specimen” must be submitted with such an application and the date of first use in commerce must be specified.
Alternatively, a federal application can be filed based on a bona fide intent-to-use (ITU). In this case, the mark has not yet been used in commerce but the applicant has a good faith intention to do so. The ITU application filing date establishes constructive use in commerce. But a statement of use (with a specimen) is still eventually required in an ITU application in order to obtain a registration—with paid extensions of time the applicant has up to about three years to do so.
Federal U.S. registrations based upon prior foreign registrations and applications as well as Madrid Protocol extensions based on a foreign application or registration are also possible.
Lastly, it is possible for a given application to include multiple filing bases. This is most common when a mark has already been used with some but not all goods or services, but use with the further goods/services in the future is intended. It is also common when priority to a foreign trademark registration or application is involved.
The Examination Process
Trademark office examination involves a search for conflicting registrations and an analysis of whether the applied-for mark meets applicable legal criteria. This is called trademark “prosecution”. Applicants can respond to any refusal sent in an “office action” by making amendments and arguments. Appeals from refusals are also possible. Additionally, even if a trademark examiner believes a mark is registrable, third parties can oppose registration and can later challenge an issued registration.
Federal registrations can take anywhere from a matter of months to years to obtain, provided that the mark is registrable at all. The timeline tends to be longer when there is a refusal (for instance, based on a prior conflicting registration or application) or an opposition to registration is lodged. State registrations may take only a matter of days to weeks, provided the mark is registrable. Foreign registration timelines vary widely.
Helpful Tips:
Although U.S. applicants can apply for registration themselves, subject to identity verification, legal advice from a knowledgeable attorney can help in obtaining the best and most appropriate coverage. Foreign trademark applicants are generally required to hire a licensed U.S. attorney.
Registrations of word marks in “standard characters” are usually the broadest because they do not include any limiting claim as to color, font, or other graphical elements in a mark that includes one or more words. On the other hand, words that are unregistrable in standard characters alone can sometimes become registrable when distinctive graphical elements are added as part of a “composite” mark that includes both word(s) and graphical element(s).
Consider the effect of expanded, reduced, or otherwise changed use of a mark over time. Such changes may may suggest pursuing one or more additional registrations. Some changes may also affect the ability to maintain an existing registration (e.g., due to a substantial changes to a graphical logo or ceasing use with certain goods/services).
State-level registration might be worthwhile if usage does not qualify for federal registration, such as purely local usage that is not part of interstate commerce.
Trademark registrations are territorial. A registration in one country will generally not provide exclusive rights in any other country. Consider foreign registration(s) if a mark is or will be used in multiple countries.
Registrations are generally even more important in other countries, where trademark rights are often determined on a first-to-register basis—sometimes without regard to priority of actual use.
For example, unrelated companies concurrently using similar brands in two different countries but later expanding to a common third country can sometimes lead to disputes.
As another example, outsourced manufacturing can also sometimes lead to trademark disputes. Export-only manufacturing in a foreign country of goods having trademarks applied to them maystill be considered trademark use under foreign law (e.g., “OEM” manufacturing in China), even without any local commercial sales in that foreign country.
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
Intellectual property (IP) litigation tends to be relatively expensive compared to other types of lawsuits. There are many reasons for that. Though the complexity of the legal issues involved and a tendency for extensive pre-trial discovery and use of expert witnesses contribute to the total costs.
Below are graphs showing average costs through various stages of a an infringement or misappropriation lawsuit in the U.S. A summary graph compares average costs for “small” patent, copyright, trademark, and trade secret cases with less than $1,000,000 at risk. There are also individual graphs for patent, copyright, trademark, and trade secret cases with different amounts at risk, that is, with different amounts of potential damages for infringement or misappropriation (in U.S. dollars). All data comes from the 2021 AIPLA Report of the Economic Survey.
Comparison of Average “Small” IP Lawsuit Costs by Type of Case and Stage
Average Patent Litigation CostsAverage Copyright Litigation Costs
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
Maintaining a U.S. trademark registration requires certain post-registration action. The following is a brief summary of the most important actions a registration should take or consider taking to maintain a trademark (or service mark) registration.
Continue Using the Mark
Continue using the mark in commerce in a consistent and non-generic manner. Such usage should be prominent enough to be recognized as a distinctive mark by consumers. Also ensure use is proper trademark usage, as an adjective that modifies a noun rather than as a noun or verb. Abandoned marks are subject to cancellation. For marks registered based solely on foreign priority, use in or with the USA must begin within three years of registration or be subject to cancellation or expungement.
Use Registration Symbol
It is recommended to use the registration symbol ® with a mark in jurisdictions where registered, or alternatively the ™ symbol. At least the first or most prominent appearance of the mark on a given article, advertisement, etc. should carry such a symbol. Use of “Registered in U.S. Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.” is also permitted for U.S. federally registered marks as well. For U.S. federal rights, there is no legal requirement to use ® or ™ symbols or the like (that is, marking is not required) in order to preserve rights in a mark. However, U.S. federal law does say that failing to use the ® symbol or an equivalent phrase can limit monetary recovery for infringement of a registered mark.
Note that some jurisdictions prohibit the use of the ® symbol with an unregistered mark. So be careful about usage across multiple jurisdictions—the ™ symbol can be used instead with a mark that is unregistered in a given jurisdiction. Moreover, registration in one or more U.S. states does not permit use of the ® symbol.
Maintain Control
If a mark is licensed for use by another, the mark owner must maintain control over the quality of the associated goods and services. Any such license should be in writing and should include an explicit quality control provision.
Retain Evidence of Use
It is recommended to periodically collect and retain in your records evidence of use of the registered mark in commerce in the U.S., particularly if not routinely documented in the ordinary course of business. Such evidence can be useful as a specimen of use or to defend against a challenge to the registration by another entity. If registration was filed on an intent-to-use (ITU) basis, or a foreign priority basis with an intent to use in the USA, it is further recommended to retain written records of that intent at the time of U.S. filing, such as detailed business plans.
Evaluate Expanded or Changed Use Over Time
If your use of the mark has expanded to encompass new or different goods/services that are not identified in the registration, it may be worthwhile to pursue an additional registration to ensure full protection. If use has ceased with some but not all of the goods/services identified in the registration, an amendment can be filed to delete only the unused goods/services. If your branding has changed, such as a “refresh” that materially alters the commercial impression of a graphical logo or the wording of a mark, it is important to evaluate whether the that new usage supports the existing registration and whether a new application should be filed.
Make Required Filings and Renew the Registration
If the owner’s name or address has changed, official records must be updated.
Maintaining a U.S. federal registration also requires submission of a Declaration of Use, with supporting evidence, between the 5th & 6th years of registration. Additionally, renewal is required between the 9th and 10th years of registration and at ten-year intervals after that, each such requiring a Declaration of Use and supporting evidence. Madrid Protocol extensions to the USA further require that the underlying international registration be maintained.
Beware of misleading, official-looking notices sent by private entities seeking payment of trademark-related fees as scams. Have a trusted trademark attorney review such notices if in doubt about whether they are a scam.
More Information
More information about maintaining trademark rights is available here.
More information about strengthening protection of a registered trademark is available here.
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
Simply establishing trademark (or service mark) rights through use and registering that mark is not the end of the story. Of course, registering a mark is the most important step that can be taken to protect a mark. But certain additional steps can be taken to further enhance or strengthen protection of a brand. The following are possible additional steps to consider in order to increase protection and exclusivity around a given mark in the United States.
Register Domain Name(s)
If not already done, consider registering domain names based upon or incorporating a mark to reduce the chances of cybersquatting. Consider also registering domains with variations on your brand and mark, such as:
Typographical errors and misspellings
Phonetic equivalents and alternate spellings (such as British vs. American English)
Abbreviations and acronyms
Transliterations or translations into other languages
Added or modified punctuation (such as dashes)
Added or synonymously substituted generic, descriptive, or disparaging terms (such as geographic, corporate, or good/service terms)
Alternate top-level domains (TLDs) that may have meaning in connection with your mark, such as country-code TLDs (ccTLDs) or generic TLDs (gTLDs) with letters that make up part of your mark or that have generic, descriptive, or disparaging meaning when used in connection with your mark
Additionally, registered trademarks can optionally be recorded in the Trademark Clearinghouse. This provides benefits that can complement defensive registration of alternate domains. For instance, the trademark holder is notified of any new gTLD domain name registrations matching the recorded trademark.
Secure Social Media Handle(s) and Account/User Name(s)
If not already done, consider locking up social media handles and accounts based upon or incorporating the mark—and maybe also variations on that brand similar to those noted above for domain names.
Record Registration with Customs
Consider recording a trademark registration with U.S. Customs and Border Protection (CBP). Such a recordation allows CBP to help block importation of counterfeit and infringing goods into the USA, as well as so-called restricted gray market articles (genuine goods imported without authorization of the U.S. trademark registration holder). However, CBP recordation requires having a valid registration on the Principal Register and further requires periodic renewal of the recordation. It is also possible to provide product identification (Product ID) guides, product test kits/tools, and other online or in-person training to CBP to aid in the identification of suspect goods by customs field agents at ports of entry. CBP recordation to block importation is a significant exception to the general rule that trademark owners have to police infringement themselves.
Record Registration with Online Marketplace Platforms
Certain online marketplaces allow trademark registrations to be recorded in their own private brand registries, such as Amazon.com’s Amazon Brand Registry and Wal-Mart’s Walmart Brand Portal. The policies and procedures for such registries vary by platform. They typically require having a granted registration on the Principal Register. Generally speaking, recording in such private registries can assist in blocking the appearance of counterfeit and infringing goods (sometimes automatically) and can also help reduce the risk that your own brand and associated goods will be blocked by the platform.
Proactively Monitor the Commercial Market
Proactively monitor both online and offline markets for potentially problematic activities by others that implicate your mark. Aside from CBP recordation (see above), the U.S. government will not monitor private trademark rights, which is left to the mark holder. Monitoring can involve visiting stores, reviewing advertising media and publications, following competitor activities, and periodic online and/or trademark database searches.
For example, monitoring allows for:
Enforcement actions, including infringement lawsuits and demand or cease & desist letters
Oppositions, cancellations, and other challenges to TM registrations and applications by others
Domain name cybersquatting actions in court or through mandatory arbitration (UDRP, URS)
Takedown requests to online platforms (availability and procedures vary by platform)
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
Maintaining rights in a trademark (or service mark) requires ongoing action. Failure to continue using a mark, or use in an improper or insufficient manner, can potentially result in loss of a registration for the mark or even loss of all exclusive rights. The following guidance provides suggestions about satisfying use requirements and the proper way to use marks in business and commercial advertising/marketing contexts. The focus is on U.S. federal trademark law, but this guidance is also informative about similar requirements at the state-level and for international usage scenarios.
Continued Use Requirement
In order to maintain rights in a mark it must continue to be used in connection with bona fide (good faith) commercial offerings of the associated goods or services. This means the most basic rule of maintaining rights in a mark is: use it or lose it!
Use on goods occurs when two conditions are met. First, a mark must be placed on the goods or their containers, or on attached tags or labels, or displays associated with the goods. If the nature of the goods makes those kinds of placements impracticable, then use of the mark on documents associated with the goods or their sale qualify. Second, for U.S. federal trademark rights, use requires that the goods (bearing the mark) be sold or transported in “commerce”, meaning interstate or foreign commerce and not only locally. Mere advertising is generally insufficient as evidence of use of a mark on goods.
Use in connection with services occurs when a mark is used or displayed in the sale or advertising of services and those services are rendered in “commerce”, or the services are rendered in more than one state or in the United States and a foreign country. An important distinction is that use of mark in advertising may be sufficient to show use in connection with services, even though advertising alone is generally insufficient to show use with goods.
Use of the trademark by an authorized licensee can be sufficient to maintain a trademark registration as long as the owner maintains control over the quality of the goods or services. Failure to maintain quality control over licensed use can result in loss of rights. Preferably, a written license agreement with a quality control provision should be executed if licensing is desired.
Non-use may make a registration subject to cancellation or the like. Moreover, non-use without an intention to resume use will result in abandonment (loss) of rights.
Excusable non-use may allow an unused registration to still be maintained. However, the requirements to establish excusable non-use are rather strict and generally require non-use to be the result of special circumstances beyond the registrant’s control.
Marks registered in the U.S. based exclusively on a foreign priority registration are subject to cancellation or expungement if they have not been used in or with the U.S. after three (3) years of registration. This is an exception to the general rule that use in commerce is required to obtain a federal registration in the first place.
Proper Form of Use
In order to maintain rights in a mark, use should take a proper form. Improper usage may weaken rights or even result in loss of rights. An explanation of proper usage follows. This includes (1) using a mark as an adjective, (2) using a mark consistently, and (3) optionally using trademark identification/status symbols. More guidance is available from the International Trademark Association here and here.
Use Mark As an Adjective
Trademarks (and service marks) function to identify the source of goods or services. To do so, the distinctiveness of the mark must be maintained. A mark that becomes the generic name for the goods or services themselves will lose trademark protection. Therefore, a mark should always be used as an adjective that modifies a noun and never as a noun or as a verb. A helpful approach is to always couple use of a mark with an appropriate generic term immediately following the mark. For instance, “EXAMPLE widgets” represents proper use of the mark EXAMPLE together with the generic term widgets.
Another helpful exercise to determine if usage is proper is to insert the word “brand” immediately after the mark (along with a generic term). If the wording still reads appropriately, in English, then usage is likely to be proper. For instance, “Buy EXAMPLE brand widgets” still reads appropriately. But “Please EXAMPLE brand me those things” reads awkwardly because the mark is being improperly used as a verb. Beyond just a theoretical exercise, the word “brand” can also be inserted into actual commercial usage this same way.
Marks should also be used prominently. This means the mark should be used in such a way that consumers would understand that it functions as a trademark (or service mark) and identifies the source of the goods or services. Consider where the mark is placed in relation to other text, graphics, or the like. The mark should grab the attention of consumers and not be buried in other text, too small to see, etc.
Although not legally required, a helpful technique is to distinguish the mark from nearby text using all capital letters, boldface or italic font, underlining, quotation marks, color, or other stylized format. A trademark symbol—discussed below—can also be used to distinguish the mark from surrounding text. These aspects of the appearance and presentation of the mark help to convey a commercial impression of the mark as indicating the source goods or services rather than in a generic or merely descriptive way.
Use Mark Consistently
A mark is a specific indicator. So usage must be consistent. If a logo is changed or word(s) are modified that materially alter the mark (so as to no longer create essentially the same commercial impression) then it is possible that rights in the mark could be challenged or lost, or renewal of a registration refused. Spelling (and punctuation, if any) should always be the same. A “refresh” of branding can lead to loss of rights in previously-used marks when it materially alters the commercial impression given by the mark.
Also, do not pluralize or singularize a mark by adding or removing an “s”, and do not use a mark in a possessive form (unless the mark itself is possessive or a non-trademark use as a company name or trade name is involved). For example, LEVI’S® for jeans should not be changed to “LEVI” because the mark includes the possessive “‘S”. Such changes do not reflect proper usage.
Use Trademark Identification/Status Symbols
It is recommended—but not legally required in the U.S. to maintain rights—to include an appropriate trademark symbol with use of a mark.
Use of the trademark registration symbol ® immediately after a mark is permitted and encouraged for any federally-registered mark, though it must not be used for an unregistered mark or for goods or services that are not listed in the the registration. For instance, a mark registered for widgets can be identified as “EXAMPLE®” on widgets and their labels or packaging.
Sometimes the term “Registered Trademark” or its translation is used, or the phrases “Registered in U.S. Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.,” but such terms are often less convenient than a symbol. An additional option is the use of a footnote or legend that indicates that the mark is a registered trademark, identifies the registered owner by name, and/or indicates that use of the mark is under license.
But registration in one or more U.S. states does not permit use of the ® symbol, or any wording that suggests federal registration.
The symbols ™ (for trademarks used with goods) or SM (for service marks used with services) can be used even with unregistered marks. For instance, an unregistered or registered trademark can be identified as “EXAMPLE™ widgets.” If there is doubt, or a given use of a mark encompasses both goods and services, use of the ™ symbol might be preferred because it is more widely recognizable.
An appropriate trademark symbol should be used with the first and/or the most prominent use of the mark on the goods, their packaging, or given advertising materials (such as a single web page or single print ad). It is not necessary to continually use trademark symbols with each and every instance of the mark on the same item. On the other hand, there is no legal penalty for unnecessary or redundant use of trademark symbols. Though over-use of trademark symbols may simply be less aesthetically pleasing in some circumstances.
Failing to use a trademark symbol does not result in the loss of U.S. federal trademark rights. However, such a failure may limit recovery of monetary damages. When a mark is federally registered in the U.S., either use of a symbol (or accepted alternative) or actual notice to an infringer is required in order to recover profits and damages for infringement. Use of the trademark registration symbol ® (or the phrase “Registered in U.S. Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.”) along with a registered mark provides acceptable notice of federal registration to all potential infringers to allow recovery of monetary damages.
Note that some jurisdictions prohibit the use of the ® symbol with an unregistered mark. So be careful about usage across multiple jurisdictions—the ™ symbol can be used instead with a mark that is unregistered in a given jurisdiction. In the U.S., use of the ® symbol with an unregistered mark may bar remedies for alleged infringement due to unclean hands, may constitute fraud, and/or may create liability for false advertising.
Retain Evidence of Use
The requirement that a mark must be used to maintain rights gives rise to a need to keep and retain evidence of use of that mark with the relevant goods and/or services. If someone ever seeks to challenge the mark for alleged non-use, or if a registration is audited, such evidence can be important. For some marks subject to extensive use, evidence of use may be plentiful and easily obtained. However, for other marks, usage might be less widespread. For example, some marks might be used with a seasonal service business such that evidence of use is mostly available only at certain times of the year.
The first important point is that evidence of use should be maintained for all goods and services in which rights to the mark are claimed. For a registration, this means all of the explicitly-identified goods and services. Evidence of use with only some but not all of the identified goods or services will usually be insufficient (at least with respect to those goods and services for which evidence of use is lacking).
The sort of evidence retained should also show proper usage of the mark. Proper use is discussed above. It may be unhelpful to retain evidence that shows improper usage in a generic or merely descriptive sense rather than to identify the source of goods or services.
Also, evidence of use should be maintained for each jurisdiction where rights in a mark are claimed. Evidence of use in one country is usually insufficient to show use in a different country, for instance. If you wish to maintain rights to an international portfolio of marks, be sure to retain suitableevidence of use of each mark in each jurisdiction of use.
Lastly, if a registration was initially filed based on a claim of an intent to use the mark (including based on foreign priority without actual use in the USA), then evidence of that intent at the time of filing should be retained too. This sort of evidence can include written business plans or the like.
Renew Your Registration
A registration of a mark must periodically be renewed to stay in effect. Registrations can usually be renewed indefinitely so long as there is continued use. The U.S. requires renewals at ten-year intervals, plus a one-time certification of use after the first five years of registration. All renewals and declarations of use to maintain a registration require supporting evidence of use.
In the U.S., “common law” rights in a mark may continue to exist even if a registration in that mark is abandoned but commercial use of the mark continues. However, that may not be the case in other countries. If a registered mark is still in use, it is usually worthwhile to renew the registration.
Extensions of an international registration under the Madrid Protocol require that the underlying international registration be maintained too. This means that both the U.S. extension registration and the international registration must be renewed in order to maintain registration in the USA.
However, BEWARE of misleading, official-looking notices sent by private entities regarding a trademark registration requesting payment of fees. These are often scams. See examples of such misleading scam communications here (USPTO-related) and here (WIPO/Madrid-related).
Updating and Amending a Registration
If the use of a mark changes, or the ownership of the mark changes (including a merger or change of name or the owner), then a registration should be updated or amended. The owner and any legal representative also have a duty to maintain current and accurate addresses in official records. This allows for prompt receipt of any official post-registration correspondence, including notifications of any challenges to the registration.
Amendments to the scope of the registration may be possible, and even required. Selected goods and services can be deleted from a registration while others remain, if the scope of use is reduced. But expansion of use generally requires filing a new application—existing registrations cannot be expanded to add new identifications of goods and services. Amendments to the depiction of the mark itself are rarely permissible.
Monitor the Marketplace
It is helpful to proactively monitor the marketplace for potentially problematic activities by others. A few instances of infringement or improper usage of a mark will generally not result in loss of trademark rights in the USA. However, the widespread presence of infringing or simply improper uses might eventually lead to genericide, that is, the mark becoming generic, which would result in the loss of exclusive rights. Laches or other equitable doctrines might also bar certain forms of relief against an infringer if a lawsuit is inexcusably delayed—though this is very context-specific.
Additionally, the existence of similar marks and registrations by others can have the effect of weakening the scope of exclusive rights. So even if third party usage does not completely destroy rights in a mark those third party uses may still weaken it.
In theory, the existence of a registration should automatically block a later registration by someone else that is likely to cause confusion. That is the point of regular examination procedures for all new trademark applications. But examination is not always perfect. There are opportunities to challenge the applications and registrations of others. But the opportunities to do so decrease over time. In any event, potentially problematic uses by others must first be identified before they can be challenged.
When it comes to infringement, mark owners must police their own rights. That is, in most situations, the government will not police infringement for you. It is generally up to the brand owner to identify infringement and pursue legal action where appropriate and desired.
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
Trademarks (and service marks) serve to identify a particular source of a product or service. The purpose of trademark law is tied to that source-identifying function. Trademark rights arise through use. Registration is optional. What matters most in terms of a brand eligibility for trademark protection is its strength or distinctiveness, together with any any prior conflicting uses of identical or similar brands already taken by others.
Generally, a brand can be protected under trademark law if it is distinctive enough to serve such a source-identifying function—and it is actually used for that purpose. There is a continuum of kinds of marks that separates distinctive ones capable of exclusive rights and ones that are not distinctive and do not entitle the user to any exclusive rights. The possibility of exclusive trademark rights depends first of all upon selecting a mark that is distinctive enough. Doing that properly requires some understanding of the strength continuum of mark distinctiveness.
Pyramid Illustration of the Strength Continuum of Marks
Brands and marks are categorized along the following range or continuum of increasing conceptual distinctiveness: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful. A mark that is fanciful, arbitrary, or suggestive is considered to be inherently distinctive and automatically is eligible for federal trademark protection—long ago these were referred to as technical trademarks. While these categories are well-established now, there may be dispute as to where any given mark falls on this continuum. Changes in how a mark is used over time can also complicate these determinations.
A fanciful mark is a non-dictionary word concocted by the user. These are sometimes referred to a coined marks. Some examples are EXXON® for petroleum and petroleum products, and many pharmaceutical brands that are completely made-up names.
An arbitrary mark is a known word used in an unexpected or uncommon way. An example is APPLE® for computers.
A suggestive mark is one for which a consumer must use imagination or any type of multistage reasoning to understand the mark’s significance. A suggestive mark does not directly describe features of the product or service but instead suggests them. Example are ESKIMO PIE® for frozen confections and KITCHENAID® for small household devices and utensils.
Descriptive terms define qualities or characteristics of a product in a straightforward way that requires no exercise of the imagination to be understood. Merely descriptive terms are not entitled to trademark protection. Only marks that have acquired secondary meaning through extensive and substantially exclusive use over a sufficient period of time attain acquired distinctiveness to potentially be protectable as trademarks. Simply being the first to use a descriptive term is not enough. An example of a merely descriptive term is “cotton” for t-shirts made at least partly from cotton, or the term “large” to describe the size of the t-shirt. An example of a descriptive mark that has acquired secondary meaning in the USA is AMERICAN AIRLINES® for air transport of passengers and freight.
Generic terms are what the public understands to be the common names of associated products or services. Another way of stating this definition is that a generic term denotes a category (genus) of goods/services of which a particular brand is one species. A generic term does not signal any particular source and can never serve as a protectable mark under trademark law. Usage and advertising can never make a generic term protectable. Some examples of generic terms are “breakfast cereal” or “television” for those same goods. Some terms that were at one time protectable can also become generic, such as “escalator” for moving walkways.
The distinctiveness of a mark depends on how it is being used. The same mark might fall in different distinctiveness categories in different contexts. For example, the mark APPLE® may be arbitrary when used to identify a source of computers but “apple” is generic when applied to the fruit widely known by that name.
When it comes to trade dress, a form of trademark protection, functional aspects are not protectable. In this sense, functional aspects of things themselves are treated like generic terms—alone they are ineligible for trademark protections. An example of a functional feature is the shape of a key that allows it to fit into a corresponding lock.
A “trade name” is somewhat different from a trademark. A trade name is the formal legal name of a corporate entity, or its formal assumed name (DBA). For instance, “Acme, Inc.” a hypothetical corporation registered in a particular U.S. state, is a trade name. While it is possible that such a company sells ACME or ACME, INC. brand widgets, it might instead sell EXAMPLE brand widgets. Trade name and trademark usage may not be the same. There tend to be different (and less stringent) legal standards applied to securing trade names than to securing trademark rights. A common mistake is to believe that forming a corporation or registering an assumed name with a state—alone—creates trademark rights, when trademark rights in the U.S. require both use of the mark (as a mark) and a sufficient level of distinctiveness.
Also keep in mind that registering an Internet domain name does not by itself establish any trademark rights. While the availability of a suitable domain name is often an important consideration when selecting and adopting a brand, domains can be registered without regard for the use and distinctiveness requirements that apply to trademarks. Moreover, using a domain URL merely as an Internet address is not the same as trademark use as a source identifier.
When selecting a mark, it is common for businesses to gravitate toward conceptually weak marks as brands because they “sell themselves” and are immediately recognized by consumers for what those marks represent. So there is less investment required at the outset to establish consumer recognition of the brand. But some things are too weak to even function as marks and will not be protectable at all. Selecting a merely descriptive term as a brand will not allow for any exclusive rights unless and until secondary meaning (acquired distinctiveness) is achieved over a significant period of time. But even descriptive marks that have acquired distinctiveness are still subject to descriptive fair usedefenses that limit the scope of exclusivity. And a generic term is never entitled to exclusivity, regardless of usage or advertising effort. Anyone who wants to have exclusive rights in a brand needs to select a mark that is distinctive enough to merit trademark protection.
Also, trademark strength can actually be assessed in different ways, to refer to either protectability or scope of exclusivity. There is inherent or conceptual strength, which categorizes how a mark naturally is or is not capable of serving as a source identifier. That is about protectability, and whether there can be any exclusive rights for a given mark when used with particular goods/services. But there is also commercial or marketplace strength, which refers to the level of exclusive use as a brand by a particular entity (secondary meaning). That is generally about the scope of exclusive rights. For instance, a suggestive mark may be conceptually/inherently strong (distinctive) enough to be protectable, but if there are many other entities using similar marks due to similar suggestive connotations then the commercial strength and degree (scope) of exclusivity in the coexisting marks is lessened. Likewise, a fanciful/coined term may be conceptually strong as a mark but may still be commercially weak if its usage has been limited in duration and there has been negligible advertising.
Lastly, recognize as well that many marks are already taken by others, which limits the universe of marks freely available for another business’ use at the time of adoption. It is not unusual for a first-choice mark (and second-choice…) to be already taken. Conducting a legal clearance when adopting a brand is recommended to avoid conflicts with someone else’s preexisting trademark rights.
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
The Scope and Limits of Trade Dress and Patent Protection in Product Shapes: Food Product Case Studies
Intellectual property (IP) protection for product configurations of comestibles, confections, foodstuffs, and the like have been a matter of dispute in courts for well over a century. A variety of distinct IP rights may be invoked in this context, among them design patents and trade dress (either as a registered or unregistered trademark). Courts have grappled with the limits of such IP rights, seeking to prevent end-runs around the expiration of patent and copyright rights that the U.S. Constitution restricts to only limited times.[i] Such limits on IP rights embody long-standing Anglo-American legal principles in place since the Statute of Monopolies curbed the English Crown’s practice of granting “odious” monopolies over common commodities to raise funds or bestow favor.[ii] Cases up to the present highlight continued aggressive assertions of trade dress rights by foodstuff manufacturers—coupled with pushback by courts to deny trade dress rights in purely functional product configurations.
A number of important historical decisions observed the tendency for assertions of trade dress in (food) product configurations/shapes/forms/designs—these terms being used somewhat interchangeably—to inappropriately extend monopoly protections after a patent expired. Judge Learned Hand authored Shredded Wheat Co. v. Humphrey Cornell Co., which dealt with alleged trade dress infringement of the shape of shredded wheat biscuits after the expiration of a design patent to the same biscuit shape.[iii] He wrote that “the plaintiff’s formal dedication of the design [upon expiration of U.S. Des. Pat. No. 24,688] is conclusive reason against any injunction based upon the exclusive right to that form, however necessary the plaintiff may find it for its protection.”[iv]
Later, the Supreme Court weighed in on a dispute between Kellogg and Nabisco, finding the pillow shape of a shredded wheat biscuit to be functional because “the cost of the biscuit would be increased and its high quality lessened if some other form were substituted for the pillow-shape.”[v] The Court stated,
“The plaintiff has not the exclusive right to sell shredded wheat in the form of a pillow-shaped biscuit — the form in which the article became known to the public. That is the form in which shredded wheat was made under the basic [utility] patent [U.S. Pat. No. 548,086]. The patented machines used were designed to produce only the pillow-shaped biscuits. And a design patent [U.S. Des. Pat. No. 24,688] was taken out to cover the pillow-shaped form. Hence, upon expiration of the patents the form . . . was dedicated to the public.”[vi]
Kellogg has remained the touchstone for cases on the limits of trade dress protection, and not just for foodstuffs. Subsequent decisions have elaborated on the non-functionality doctrine without changing the basic framework.[vii]
In a more modern case, Sweet Street Desserts, a “Blossom Design” for a round, single-serving, fruit-filled pastry with six folds or petals of upturned dough was held to be functional and, accordingly, unprotectable as trade dress because the product’s size, shape, and six folds or petals of upturned dough were all essential to the product’s ability to function as a single-serving, fruit-filled dessert pastry.[viii] Only incidental, arbitrary, or ornamental product features that identify the product’s source are protectable as trade dress. Chudleigh’s trade dress Reg. No. 2,262,208 was cancelled.[ix]
In Ezaki Glico v. Lotte, the non-functionality requirement was assessed in connection with Ezaki Glico’s POCKY® treats—thin, rod- or stick-shaped cookies partially coated in chocolate (with optional nuts)—and Lotte’s competing PEPERO® treats.[x]
Ezaki Glico’s trade dress Reg. Nos. 1,527,208 (left) and 2,615,119 (right)Photos of original (left) and album (right) PEPERO® treats (for scale, these are about the size of a medium-length bamboo cooking skewer)
The core dispute was how to define “functional” for product configuration trade dress. Ezaki Glico argued a narrow reading, equating “functional” with “essential.” The court disagreed, reading Supreme Court precedent to say that product configuration features need only be useful to be functional. That is, a product shape feature is “useful” and thus “functional” if the product works better in that shape, including shape features that make a product cheaper or easier to make or use. The 3rd Circuit held that a product feature being “essential to the use or purpose of the article or if it affects the cost or quality of the article”[xi] is merely one way to establish functionality.[xii] A product feature is also unprotectably functional if exclusivity would put competitors at a significant, non-reputation-related disadvantage.[xiii] The rejection of a narrow reading of the functionality doctrine echoes cases in other circuits characterizing the Supreme Court’s TrafFix case as setting forth two ways to establish functionality.[xiv] There are several ways to establish functionality that are not limited to merely “essential” product features.
Functionality in the trade dress context is commonly assessed through the following types of non-dispositive evidence, as summarized in Ezaki Glico:
“First, evidence can directly show that a feature or design makes a product work better…. Second, it is ‘strong evidence’ of functionality that a product’s marketer touts a feature’s usefulness. Third, ‘[a] utility patent is strong evidence that the features therein claimed are functional.’ Fourth, if there are only a few ways to design a product, the design is functional. But the converse is not necessarily true: the existence of other workable designs is relevant evidence but not independently enough to make a design non-functional.”[xv]
There was evidence of practical functions of holding, eating, sharing, or packing the POCKY treats. Ezaki Glico’s internal documents showed a desire to have a portion of the stick uncoated by chocolate to serve as a handle. The court also noted how the size of the sticks allowed people to eat them without having to open their mouths wide and made it possible to place many sticks in a package. Ads for POCKY treats also emphasized the same useful features. Ezaki Glico proffered nine examples of partially chocolate-coated treats that do not look like POCKY treats, but the court found that evidence insufficient to avoid the conclusion that every aspect of POCKY treats is useful.
Finally, the court concluded that Ezaki Glico’s utility patent U.S. Pat. No. 8,778,428 for a “Stick-Shaped Snack and Method for Producing the Same” was irrelevant. The court’s rationale for that conclusion, however, is rather unconvincing. The utility patent was applied for in 2007, with a 2006 Japanese priority claim, which was long after Ezaki Glico began selling POCKY treats in the U.S. in 1978, and also long after Lotte began selling the accused PEPERO treats in 1983 and the first explicit allegations of misconduct in 1993. That patent was also still in force (i.e., unexpired). The utility patent corresponded to an “ultra thin” version of POCKY treats and Ezaki Glico argued that its patent addressed only one of many embodiments covered by its trade dress.
The lower court discussed utility patent disclosures regarding stick warping formulated like a problem-solution statement[xvi]—somewhat akin to inventive step (obviousness) analyses in European patent practice. But unmentioned was how the patent’s disclosed stick holder necessarily produces a partial chocolate coating.[xvii] The 3rd Circuit’s reasoning about the irrelevance of the utility patent is superficial to the point of being mere tautology. The appellate opinion did not address Kellogg’s statement that the form in which a food article was made under an expired “basic” patent was relevant to trade dress eligibility or other circuits’ cases that deemed a prior manufacturing method patent to be relevant. Moreover, the court did not address the way mere descriptiveness of just one good bars registration of a trademark for an entire group of goods encompassing additional, different goods.[xviii] Whether a later-filed patent can ever provide grounds to cancel an earlier trade dress registration for functionality is a question the court essentially avoided deciding.
Something else not discussed in Ezaki Glico was the 3rd Circuit’s decision nearly a century ago in the Eskimo Pie case.[xix] There, the validity of U.S. Pat. No. 1,404,539 on the original ESKIMO PIE® chocolate-covered ice cream treat was at issue. The court held the utility patent invalid, reasoning with regard to claim 6 (in which the core and casing form a “substantially rectangular solid adapted to maintain its original form during handling”) that “[t]here is no invention in merely changing the shape or form of an article without changing its function except in a design patent.”[xx] The rectangular solid shape was found non-functional and therefore unable to distinguish the prior art in a utility patent claim. The lower court had already pithily reached these same conclusions:
“The gist of the invention, if there be one, is in sealing a block of ice cream in a sustaining and self-retaining casing of chocolate. A rectangular piece of ice cream is coated with chocolate…. All that the patentee does is to take a small brick of ice cream and coat it with chocolate, just as candies are coated. [In the prior art,] Val Miller took a round ball of ice cream and coated it, just as candies are coated. In one case the ice cream is round in form, and in the other case it is rectangular. In both cases there is a sustaining and self-retaining casing, sealing the core of ice cream…. There is no invention in form alone.”[xxi]
U.S. Pat. No. 1,404,539
In a fascinating Wired article from 2015, Charles Duan located correspondence with the inventor’s patent attorney and other pertinent historical information in museum archives.[xxii] Duan highlighted how the invention, if anything, was really about the particular formulation of chocolate that allowed it to work effectively as a coating on a frozen ice cream treat, while the patent contains no disclosure in that regard and its claims were intended to be preemptive.[xxiii] Invalidation of the ESKIMO PIE patent opened the door for the KLONDIKE® ice cream treat, introduced in 1928, which was later the subject of an 11th Circuit trade dress case about product packaging (as opposed to product configuration) for a wrapper with a pebbled texture, images of a polar bear and sunburst, bright coloring, and square size that, in combination, were held non-functional.[xxiv]
Courts have tended to be more lenient on (food) packaging trade dress when it comes to functionality.[xxv] This held true when the 11th Circuit later found the unregistered product design of DIPPIN’ DOTS® multi-colored flash-frozen ice cream spheres/beads to be functional and thus ineligible for trade dress protection.[xxvi] An unexpired utility patent (U.S. Pat. No. 5,126,156)—later held invalid and unenforceable[xxvii]—was specifically cited as evidence of functionality of the product design, along with judicial notice that certain colors connote ice cream flavor.[xxviii]
So, in 1929, the 3rd Circuit ruled that the configuration of an ESKIMO PIE treat was ornamental and non-functional, and therefore unpatentable in a utility patent; whereas, in 2021, the Third Circuit ruled that the configuration of a POCKY treat was functional, and therefore ineligible for trade dress protection. How can these decisions be reconciled?
The only way to square these cases is to say that “functionality” in the trade dress context means something legally different than in the patent context. So, an ice cream treat’s shape/configuration was insufficiently functional to support a utility patent claim though a cookie treat’s shape and configuration was too functional (useful) to support trade dress protection. But courts and other commentators often stop well short of explaining why “functionality” differs in these two contexts, or what specific evidence would differ—aside from the separate need to prove inherent or acquired distinctiveness to establish trade dress rights.[xxix]
The ultimate conclusions in the two cases, however, are very consistent in seeking to limit overreaching IP assertions. The functionality doctrine for trade dress has long been used to scrutinize attempts to secure a potentially perpetual trademark monopoly on product feature(s) thatconsumers desire in the product itself apart from any unique but optional source-identifying function(s) of product configuration—as well as manufacturers’ concerns about ease and cost of manufacturability. In the patent context, utility requirements at least implicitly revolve around the technological arts rather than aesthetic, saleability, and product source identification concerns—those might be called functions but they are not the type of inventive functions that are eligible for utility patent protection.
But the courts have yet to make explicit the precise role, if any, of the relevant consumer’s perspective in this analysis, which would seem to be a legitimate inquiry in the trade dress context in a way it would not be in the utility patent context, for instance. Admittedly, the “ordinary observer” test used for infringement of design patents blurs this distinction somewhat, especially given that one appeals court has held that conflation of the trademark likelihood-of-confusion test and the design patent ordinary-observer test is harmless error.[xxx] But evidence of non-reputational consumer desires, such as a consumer survey or similar expert testimony, would appear to be rather unique to product configuration trade dress considerations and in closer cases might not always be answered or rendered unnecessary by the admissions or conduct of the alleged trade dress owner.
Certainly, many trade dress product configuration cases do turn on admissions or statements (such as ads) by the owner that indicate functionality or the failure of the owner to meaningfully rebut the persuasive articulation of functionality readily observable in the product itself. Additionally, parties aggressively enforcing trade dress have often also pursued or obtained another form of protection, such as a patent, and statements made in (or during the prosecution of) a patent on the same or similar subject matter can be relevant to trade dress functionality.[xxxi] The Supreme Court has gone so far as to explicitly note that invoking trademark rights as patent rights expire is suspicious enough to create “a strong implication” the party is seeking to improperly extend a patent monopoly and that summary disposition of anticompetitive strike suits is desirable.[xxxii] This means consumer surveys or the like should not become routinely necessary. Yet cases may arise where consumer perceptions of functionality (or usefulness) are not immediately apparent from the product configuration itself, or the plaintiff has not made damaging statements, making survey evidence informative in the absence of more straightforward grounds for assessing functionality. This seems like a potential additional (fifth) category of functionality evidence not spelled out in cases like Ezaki Glico.
Conclusion
Foodstuff product configuration trade dress disputes provide an excellent case study of how courts have sought to preserve consumer access to functional product features, as well as producer access to easy and economical manufacturing techniques. After all, the purpose of trademark law in general is supposed to be about helping consumers identify whether something originates from company A or company B, for instance, but it is not meant to give anyone a monopoly on that something itself. Unless product configurations are relatively easily avoided by competitors making basically the same products, assertions of trade dress protection in pure product configurations have often been rejected. While courts remain sensitive to potential confusion over a product’s source, valid product configuration trade dress rights, as a matter of branding, should include a prominent, non-functional feature related to reputation that does not significantly diminish consumer enjoyment or ease of manufacturability.[*]
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
[vii] See TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 28-32 (2001); Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 213-16 (2000); Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 164-65 (1995); Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 771,775 (1992); Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989); Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n.10 (1982); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 228-32 (1964); Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 238 (1964); see alsoScott Paper Co. v. Marcalus Mfg. Co., Inc., 326 U.S. 249, 255-57 (1945).
[viii] Sweet Street Desserts, Inc. v. Chudleigh’s Ltd., 69 F. Supp. 3d 530, 532-33 and 546-50 (E.D. Pa. 2014) aff’d 655 F. App’x 103 (3d Cir. 2016); see also 15 U.S.C. § 1064(3).
[ix] Sweet Street Desserts, Inc. v. Chudleigh’s Ltd., No. 5:12-cv-03363 (E.D. Pa. Jan. 15, 2015) aff’d 655 F. App’x 103.
[xi] Qualitex, 514 U.S. at 165 (quoting Inwood, 456 U.S. at 850, n.10).
[xii] Ezaki Glico, 986 F.3d at 257; accordPIM Brands Inc. v. Haribo of Am. Inc., No. 22-2821 (3d Cir. Sept. 7, 2023) (alleged trade dress of wedge shape and red/white/green color scheme made watermelon candy identifiable and reminiscent of a watermelon wedge and was therefore functional and unprotectable, with Principal Register registration ordered to be cancelled; “[f]unctionality is not a high bar” and “[e]ven if the design chosen both promotes a brand and also ‘makes a product work better,’ it is functional and unprotectable.” (citing Ezaki Glico, 986 F.3d at 258)); cf. Sulzer Mixpac AG v. A&N Trading Co., 988 F.3d 174, 182-84 (2d Cir. 2021) (color-coding to denote size of dental mixing tips improved the operation of the goods, which affects their quality, and therefore was functional and unprotectable as trade dress even though not essential).
[xiii] Ezaki Glico, 986 F.3d at 257 (quoting TrafFix, 532 U.S. at 32).
[xiv] Dippin’ Dots, Inc. v. Frosty Bites Dist., LLC, 369 F.3d 1197, 1203 (11th Cir. 2004); Groeneveld Transp. Efficiency, Inc. v. Lubecore Int’l, Inc., 730 F.3d 494, 506-09 (6th Cir. 2013); Schutte Bagclosures Inc. v. Kwik Lok Corp., 193 F. Supp. 3d 245, 261-62 (S.D.N.Y. 2016) aff’d 699 F. App’x 93, 94 (2d Cir. 2017).
[xvi] Ezaki Glico Kabushiki Kaisha v. Lotte Int’l Am. Corp., No. 2:15-cv-05477, 2019 WL 8405592 at *6 (D.N.J., 7/31/2019).
[xvii] See holder (61), which holds one end of stick-shaped pastries (40) while (only) the other end is immersed in a container (62) of liquid coating material (e.g., chocolate). U.S. Pat. No. 8,778,428, FIG. 5 and col. 5, lines 15-18 & 45-50.
[xviii] See TMEP §1209.01(b) (Oct. 2018).
[xix] Eskimo Pie Corp. v. Levous, 35 F.2d 120 (3d Cir. 1929).
[xx] Id. at 122; see also, e.g.,E.H. Tate Co. v. Jiffy Ents., Inc., 196 F. Supp. 286, 298 (E.D. Pa. 1961); James Heddon’s Sons v. Millsite Steel & Wire Works, 128 F.2d 6, 13 (6th Cir. 1942).
[xxi] Eskimo Pie Corp. v. Levous, 24 F.2d 599, 599-600 (D. N.J. 1928).
[xxiii] Id.; cf., Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 223-24 (2014); Mayo Collab. Servs. v. Prometheus Labs, Inc., 566 U.S. 66, 72-73 (2012).
[xxiv] AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1535-38 (11th Cir. 1986), cert. denied, 481 U.S. 1041 (1987), abrogated by Wal-Mart, 529 U.S. at 216, but see The Islay Co. v. Kraft, Inc., 619 F. Supp. 983, 990-92 (M.D. Fla. 1985).
[xxv] E.g., Spangler Candy Co. v. Tootsie Roll Inds., LLC, 372 F. Supp. 3d 588, 604 (N.D. Ohio 2019); Fiji Water Co., LLC v. Fiji Mineral Water USA, LLC, 741 F. Supp. 2d 1165, 1172-76 (C.D. Cal. 2010).
[xxvi] Dippin’ Dots, 369 F.3d at 1202-07; see also 15 U.S.C. §1125(a)(3). The court incorrectly stated unregistered product configuration trade dress can be inherently distinctive, a position abrogated by Wal-Mart.
[xxvii] Dippin’ Dots, Inc. v. Mosey., 476 F.3d 1337 (Fed. Cir. 2007).
[xxviii] Dippin’ Dots, 369 F.3d at 1205-06.
[xxix] See Keystone Mfg. Co., Inc. v. Jaccard Corp., No. 03-CV-648, 2007 WL 655758 (W.D.N.Y., Feb. 26, 2007).
[xxx] Unette Corp. v. Unit Pack Co., 785 F.2d 1026, 1029 (Fed. Cir. 1986); see also Converse, Inc. v. Int’l Trade Comm’n, 909 F.3d 1110, 1124 (Fed. Cir. 2018) (calling the standards “analogous”).
[xxxi] TrafFix, 532 U.S. at 29-32; Dippin’ Dots, 369 F.3d at 1205-06.
[xxxii] Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 181 (1896); Wal-Mart, 529 U.S. at 213-14; see alsoMorton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942) (misuse of patent on machine to restrain unpatented salt tablet sales); Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) (improper trademark law false designation of origin assertion after copyright expiration); EMI Catalogue P’ship v. Hill, Holliday, Connors, Cosmopulos, Inc., 228 F.3d 56, 63-54 (2d Cir. 2000) (“musical composition cannot be protected as its own trademark” because “[t]he creation and expression of an original work is protected by copyright law, and once an original work has been produced trademark law is not the proper means of protecting the rights in this originality”; declining to rule “that a product itself—in this case, the song—can serve as its own trademark”); Korzybski v. Underwood & Underwood, Inc., 36 F.2d 727, 728-29 (2d Cir. 1929) (election of protection doctrine bars copyright after obtaining patent: “An inventor who has applied for and obtained a patent cannot extend his monopoly by taking out a copyright . . . on what he has already diagrammatically disclosed”) accord Vacheron & Constantin-Le Coultre Watches, Inc. v. Benrus Watch Co., 260 F.2d 637, 642 (2d Cir. 1958) (“grant of a patent presupposed a dedication to the public of the disclosure, except so far as the statute specifically reserved it to the patentee”).
Businesses often hire vendors to develop things for them, perhaps due to a lack of expertise in some particular area or just a lack of capacity. The vendor might be another firm, an individual independent freelancer, a temporary contractor working on-site, or some other type of consultant. This is often referred to as outsourcing. But who owns the intellectual property (IP) for things the vendor creates? This question should be asked at the beginning of a vendor relationship. Ideally, it should be answered before hiring the vendor.
All too often businesses ignore ownership of IP rights until there is infringement or a big business deal long after the vendor was hired. But cutting corners or forgetting to put IP ownership in writing at the beginning of a vendor relationship can potentially have huge (if avoidable) consequences later on. Businesses do come to regret such oversights later on. For instance, when selling a business, a prospective buyer might raise questions about lack of IP ownership due to vendor or outside contractor involvement, which might present barriers to completing the sale or might lower the purchase price. Or, when there is infringement, a business lacking ownership will not have standing to sue the infringer while the vendor (who still owns the IP) may be unconcerned and disinterested.
A common mistake is to wrongly assume that merely paying a vendor automatically transfers IP ownership or that receiving physical copies (even the sole original) transfers IP ownership. In the absence of something in writing, the vendor most likely retains any patent or copyright ownership interests. Vendors, for their part, may also be ignorant or misinformed about IP rights. Anyone hiring a vendor should not assume that the vendor understands potential IP issues or that the vendor’s standard agreement (sometimes called a master services agreement) will adequately or satisfactorily address and allocate IP ownership.
Type of IP
Default Owner (Subject to Exceptions)
Patents
Inventor(s)
Copyrights
Author(s)
Trademarks
User of mark (to designate source)
Trade Secrets
Rightful owner
Table Summarizing Who Typically Owns IP Initially (In the Absence of an Agreement or Local Law to the Contrary)
Seeking to obtain IP rights from a vendor after the end of the relationship can be difficult. You may find yourself without leverage to insist upon vendor cooperation or the vendor may no longer exist (or be deceased). And vendors may opportunistically seek windfalls to assign over IP rights after-the-fact. In worst-case scenarios, the vendor may own the IP and be able to freely commercialize it to your disadvantage, as well as to potentially block further independent development by you.
From the vendor’s perspective, an assignment of IP rights might be undesirable. But this is a question of leverage (bargaining power) and whether the vendor is willing and able to turn down potential new work. Though a suitable compromise may be to provide a license-back to a vendor, allowing certain uses by the vendor while still transferring IP ownership to the vendor’s client. An example is a portfolio license allowing the vendor to show examples of past work to potential clients. What makes sense in any particular situation will vary, of course.
Patents and Copyrights
For patents and copyrights, the general rule in the United States is that whoever creates the IP is the owner. In the absence of a written agreement to the contrary, this means that a vendor will generally own any patent rights or copyrights stemming from the vendor’s own efforts by default, even if the customer paid the vendor for it. But there are exceptions. And it is possible to agree in advance who will own the IP — that generally needs to be in writing.
“For patents and copyrights, the general rule in the United States is that whoever creates the IP is the owner.”
By statute, transfer of ownership of patents (or a patentable invention) and copyrightsmust be in writing — though copyright law allows the copyright owner’s duly authorized agent to sign an assignment. Any written document, including purely electronic materials, could include or constitute an assignment if it shows intent to presently transfer ownership rights. The written document should use words like “assigns”, “hereby assigns”, “hereby conveys, transfers, and assigns”, etc. to create a present transfer of ownership. Oral assurances will not transfer ownership of an invention (patent) or copyright; although limited implied non-exclusive licenses or equitable rights (e.g., shop rights) might still arise without being in writing.
Agreements that constitute merely an obligation to assign — typically phrased in the future tense such as with “will own” or “shall assign” language — do not effectuate an assignment of IP. Rather, obligations to assign require later execution of a separate written assignment. But ambiguous language relating to possible future agreements (such as “shall be owned as agreed upon”) may not even create an obligation to assign.
Some jurisdictions have different default rules about IP ownership. At least one U.S. state, Nevada, may vest initial ownership of patent rights with the inventor’s employer rather than the inventor by statute. Under common law, a “hired to invent” doctrine may affect patent ownership too, in limited scenarios. Some other countries also have laws that place ownership of an invention in the hands of the employer rather than the inventor. Though sometimes these laws establish only an obligation to assign. It is important to consider the location of the vendor, the location(s) of the individuals involved, and the location(s) were relevant activities took place to determine which jurisdiction’s laws will apply.
Joint development may also result in joint ownership. If the vendor and your business collaborate to jointly develop IP, by default they are each the owner of an equal and undivided interest in the entire IP right(s). Under the patent laws, in the absence of an agreement, co-owners can each independently exploit the invention without an accounting to the other (though all co-owners must join a lawsuit to have standing to sue an accused infringer). Under copyright case law, an accounting is due to the other co-owner(s) for profits arising from the jointly-owned work to prevent unjust enrichment. Joint development agreements or the like can set forth various ownership rights in advance and can also govern the handling of relevant pre-existing “background” IP.
All the above concerns also apply to vendors themselves. For patents, an invention by a vendor’s employee is generally not automatically owned by the vendor. And if a vendor retains a subcontractor or non-employee then copyright ownership would likely initially vest in the subcontractor/non-employee creating a given work in the absence of an assignment or valid work made for hire agreement. Therefore, in the absence of a warranty relating to the vendor’s ownership of IP and/or a no-subcontracting contractual provision, or intimate knowledge of the circumstances involved in the creation of the IP, there is no assurance that an assignment from the vendor (alone) will transfer all IP ownership to you.
“Work Made for Hire”
An important potential exception to initial ownership under U.S. copyright law involves oft-misunderstood “work made for hire” statutory provisions. There are two, and only two, ways to qualify something as a work made for hire under current law. First, a copyrightable work prepared by an employee within the scope of his or her employment is deemed authored by and thus automatically owned from the outset by the employer. But vendors and even “internal” independent contractors do not fall within that definition.
Second, parties without an employee/employer relationship can also agree in writing that a work will be a “work made for hire” but only for nine categories of uses of works enumerated in 17 U.S.C. § 101, which may not apply—parties cannot contractually expand those statutory categories.
A “work made for hire” is-
(1) a work prepared by an employee within the scope of his or her employment; or
(2) a work specially ordered or commissioned for use [i] as a contribution to a collective work, [ii] as a part of a motion picture or other audiovisual work, [iii] as a translation, [iv] as a supplementary work [see definition below], [v] as a compilation, [vi] as an instructional text, [vii] as a test, [viii] as answer material for a test, or [ix] as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.
Definition of copyright “work made for hire” from 17 U.S.C. § 101
The “work made for hire” doctrine is frequently misunderstood. In practice, it might even be single the most misapplied and confusing provision in all IP law. Simply because you pay someone to make or provide something copyrightable is not enough. And even having a contract that purports to establish something a work made for hire may not actually achieve that goal. It is fairly common for contracts to include language about work made for hire that does not apply and has no legal effect. Only things that meet the statutory definition of “work made for hire” are legally effective.
Because the statute defines categories of possible works made for hire by a somewhat arbitrary and limited list, which is based on “use” rather than the inherent characteristics of the work, it may be difficult to know upfront if something will qualify with certainty. For instance, if a vendor is specially commissioned to write some text, that text could qualify as a work made for hire if commissioned for use as an “instructional text” but the identical text would not if instead commissioned for use in a novel or on an advertising billboard. Moreover, whether vendor-created software source code qualifies as “a contribution to a collective work” and/or “a compilation”, and was intended to be used in that manner, may be far from clear, particularly before any work begins. And agreements, on their face, may not clarify these crucial facts.
A work made for hire not only affects who owns the work but also who is considered the author. This can potentially be significant for copyright termination rights. The persons(s) who actually prepare a work made for hire have no termination rights, whereas person(s) who assign rights to a work can potentially invoke terminate prior assignment transfers (or licenses) decades later.
For older works, created before the 1976 Copyright Act, a much different “instance and expense” test was applied to determine who is the copyright owner. Under that older test, which is inapplicable to recently-created works but can still apply to old works, the commissioning or hiring party may be treated as an “employer” and thus the “author” and copyright owner for things a vendor or outside contractor creates—regardless of the type of intended use of the work.
Trade Secrets
The rightful owner of trade secret rights will be the party that develops the trade secret information, by default. This means technical know-how, etc. developed independently by a vendor will normally belong to the vendor. It may be unclear whether relevant trade secrets were part of “background” IP that pre-dated a relationship with the vendor or not, which can potentially become a point of dispute later on. But a written agreement can be used to establish intended trade secret ownership from the outset.
On the other hand, confidential information developed by a vendor might lose trade secret status if shared with a client business (or others) without reasonable measures to maintain secrecy. This might limit or prevent a vendor from attempting to assert trade secret rights against its client and/or its client’s customers, particularly if there was no non-disclosure agreement (NDA) or other enforceable contract term.
Trademarks
U.S. trademark rights accrue to the party actually using a mark in connection with commercial activity to designate the source of goods and/or services. For instance, a marketing firm creating a brand strategy and identifying a proposed mark for a client would not obtain U.S. trademark rights because only the client business would use (or intend to use) the resultant mark in commerce. But many other countries have first-to-register systems, which might allow a vendor to register your mark. Ownership of non-trademark rights, such as copyright, in graphical logos intended to be used as trademarks might be a little more complicated and might raise other issues too, including a potential divergence in who owns the copyright and trademark rights.
Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.
