Remedies for Trade Name Infringement

• Jurisdiction: Colorado,United States
• Citation: Vol. 28 No. 7 Pg. 67
• Pages: 67
• Publication year: 1999

28 Colo.Law. 67 Colorado Lawyer 1999.

1999, July, Pg. 67. Remedies For Trade Name Infringement

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67

Vol. 28, No. 7, Pg. 67

The Colorado Lawyer
July 1999
Vol. 28, No. 7 [Page 67]

Specialty Law Columns
Business Law Newsletter
Remedies For Trade Name Infringement
by Craig N. Johnson

Unauthorized use or infringement of a business' trade name can cause confusion in the minds of customers, and may result in a loss of good will built up through substantial time and expense. However, while federal and state statutes may allow businesses to register their trade names as trademarks, many Colorado businesses continue to operate without such protection. The first time a business considers such steps may occur only after it has discovered a competitor's infringement. This article provides an overview of some of the statutory and common law remedies that are available for the protection of trade names

If Neither Party Has a
Registered Trademark

If a business discovers that a competitor is infringing on its trade name, and neither party has registered the name as a trademark, the business may attempt to register its trade name as a trademark. Colorado law permits a business to obtain exclusive rights to a trade name in Colorado by registering the name as a trademark.1 The federal Lanham Act provides a national system for the registration of trade and service marks, and affords nationwide protection for marks that are registered in accordance with the Act.2

The registration process, however, may take anywhere from a few months to several years before the mark is finally registered. While registration may provide additional protection against infringement moving forward, the application alone will not resolve any infringement existing at the time of the application. To remedy infringement without the protection of a registered trademark, a business may assert claims under the Lanham Act, common law trademark or unfair competition theories, or the Colorado Consumer Protection Act, as discussed below

Infringement Claims Under The Lanham Act

The Lanham Act provides protection for trademarks that are not registered, in addition to the remedies for marks that are registered. Specifically, § 43(a) of the Lanham Act provides

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which—

(A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, for commercial activities by another person . . . shall be liable in a civil action by any person who believes that he or she is likely to have been damaged by such act.3

In order to establish a claim under the Lanham Act, a plaintiff must show (1) that it has a valid mark, and (2) the defendant's use of the same or similar mark is likely to cause confusion in the minds of consumers.

To constitute a valid trademark, a trade name must distinctively identify the plaintiff's products or services.4 A trade name that is "generic" or that consists only of the common name of the products or services provided is not subject to protection under the Lanham Act.5 Thus, a trade name such as "Furniture Store" would generally not be entitled to protection as a trademark, as it is simply a generic description of the services provided. Similarly, a trade name that is merely descriptive of some attribute of the products or services provided would not be entitled to trademark protection unless it has acquired a "secondary meaning."6

A trade name acquires "secondary meaning" when "it has been used so long and exclusively with respect to user's services that the purchasing public has come to understand that the services are coming from a single source."7 A court may consider factors such as the length and manner of the name's use, the use of the name in advertising, the plaintiff's intent to promote a connection between the name and its goods and services, and the extent to which the public identifies the name with the business.8 "Substantially exclusive and continuous use" of a name for a period of five years may be considered prima facie evidence that it has acquired a secondary meaning.9

If a trade name constitutes a valid trademark under the Lanham Act, a plaintiff must next establish a "likelihood of confusion" arising from the defendant's use of the same or similar name. "Likelihood of confusion" is a question of fact to be determined from the point of view of an ordinarily prudent buyer, not a buyer who makes no examination of the respective products of the plaintiff and defendant.10 To establish this element, it is necessary to show that consumer confusion is probable, not merely possible.11

A number of potential factors bear on whether a "likelihood of confusion" exists, including the similarity of the plaintiff's and defendant's goods or services, the identity of retail outlets or purchasers the identity of advertising media, the "strength" (for example, inherent distinctiveness) of the trade name, the defendant's intent, the similarity of the trade names, and the degree of care likely to be used by consumers.12 The Lanham Act itself sets forth a number of additional factors, including the geographical context in which the trade names are used, the use of the same or similar names by third parties, and the degree to which the name is recognized.13 The strongest evidence of confusion, however, is proof that actual confusion has occurred.14 For example, evidence that consumers have called the plaintiff's business intending to contact the defendant's business,15 confusion in the delivery of mail or goods,16 or attempts...