Assuming the Presumption: Challenging the Presumption of Strength of Federally Registered Trademarks.

• Author: Cowan, Korey

1. INTRODUCTION

   Protecting individuals from confusion: This is considered one of the most basic tenets of modern American trademark law. (1) Consequently, the likelihood of confusion has been the fundamental test of common law and statutory trademark infringement cases. (2) Case law precedent and the influence of the Restatement have developed a flexible, multifactor test for evaluating whether a defendant's use is "likely to cause confusion, or to cause mistake, or to deceive." (3) Trademark strength is typically one of the factors that circuits consider in likelihood of confusion cases. The Trademark Act of 1946 (Lanham Act), the federal statute governing U.S. trademark law, explicitly grants a presumption of validity as to the ownership of federally registered trademarks, and a handful of courts have also granted a presumption of strength in the context of infringement cases. (4) Utilization of such a presumption has given trademark registrants a further advantage in some courts.

   The goal of this Article is to illustrate the courts' different applications of a presumption of strength for registered trademarks in likelihood of confusion analyses. By developing a background on trademark law and providing case studies, this Article will review the ways courts apply this presumption. (5) This Article will also explore the majority and minority views among courts when a registered trademark reaches "incontestable" status. (6) As a result, this Article surveys the current state of the land regarding the application of a presumption of strength and illustrates the effect it has on the likelihood of confusion analysis.

2. UNDERSTANDING TRADEMARK LAW

   1. Goals and Interests of Trademark Protection

      Once described as a "battleground for competing policies[,]" the goals and interests of trademark law have often been explained as a balance between protecting a trademark holder's property rights and protecting consumers from confusion. (7) Historically, the goal of trademark law can best be described through the words of Judge Learned Hand who stated, "We are nearly sure to go astray in [trademark law] as soon as we lose sight of the underlying principle that the wrong involved is diverting trade [by misleading consumers]." (8) This goal of avoiding consumer confusion is distinguishable from how Lord Westbury described the goal of trademark law when he stated that "the jurisdiction of the Court in the protection given to trade marks rests upon property." (9) By the 1980s, as Judge Easterbrook stated in his opinion in Scandia Down Corp. v. Euroquilt, Inc., (10) trademark law began focusing on the economic benefits to consumers, treating trademarks as a vehicle for information about sellers' products and thereby lowering informational costs of consumers. (11) Thus, over the years, courts have maintained competing interests in trademark law in protecting consumers from confusion while also protecting the trademark holder's investment, whether we consider goodwill a corollary to protection against confusion or a property right.

   2. Federal Trademark Rights

      Trademark rights in the United States derive primarily from use rather than registration. (12) Both registered and unregistered marks can receive protection against infringement. Section 32 of the Lanham Act protects registered marks from any use that is "likely to cause confusion, or to cause mistake, or to deceive," while section 43(a) of the Lanham Act and various state laws extend this protection to unregistered marks. (13) Nevertheless, federal trademark registration on the United States Patent and Trademark Office's (USPTO) Principal Register provides significant benefits such as federal court jurisdiction and the ability to obtain statutory damages against counterfeiters. (14) A trademark must meet several requirements to be eligible for federal trademark protection. 15 One condition is trademark distinctiveness, discussed in detail below, which requires that a trademark must be capable of distinguishing the trademark holder's goods or services from others in the marketplace. (16) A second condition is that a trademark must also be used in commerce. (17) Finally, to qualify for registration, a trademark must not fall within one of the statutory bars established by section 2 of the Lanham Act, some (but perhaps not all) of which apply equally in evaluating eligibility for common-law protection. (18)

   3. Distinctiveness

      Under section 45 of the Lanham Act, the definition of a trademark requires that the mark be capable of identifying and distinguishing one's goods and indicating the source of those goods. (19) It is not necessary for a trademark to indicate the precise source of the goods, as consumers only need to have confidence that all goods utilizing a given trademark are associated with a single--even if unknown--source. (20) To qualify as "distinctive," a trademark must either be "inherently distinctive" of its source or have "acquired distinctiveness." (21) An inherently distinctive mark is one whose intrinsic nature serves to identify a particular source of a product, while a trademark may acquire distinctiveness through an individual's use of a trademark in commerce; when this happens, the trademark is said to have acquired "secondary meaning." (22) An example of an inherently distinctive mark is "Apple" for computer products, while an example of a mark that has acquired distinctiveness is "Total Moisture" for hair conditioner. (23)

      To determine both inherent distinctiveness and strength, courts tend to use a four-category spectrum developed in Abercrombie & Fitch Co. v. Hunting World, Inc. (24) These categories are: (1) generic, (2) descriptive, (3) suggestive, and (4) arbitrary or fanciful. (25) As Judge Friendly noted in Abercrombie, line drawing between these categories can be difficult, as terms may fall differently along the Abercrombie spectrum depending on the particular market in which the mark is being used. (26)

      Beginning with the lowest level of distinctiveness on the Abercrombie spectrum, the first category includes generic terms referring "to the genus of which the particular product is a species." (27) The Trademark Manual of Examining Procedure (TMEP) defines generic terms as "terms that the relevant purchasing public understands primarily as the common or class name for the goods or services." (28) Examples of these terms include "apples" used for fruit and "software" used for software products. Therefore, in accordance with section 14(c) of the Lanham Act, a generic term is not protectable as a trademark under any circumstances, as it would deprive competition from others within the same market, because they could not call the product by its name. (29)

      The second category on the Abercrombie spectrum includes descriptive terms. Section 2(e) of the Lanham Act states that "merely descriptive" marks are not registrable, nor can they receive protection based merely on use. (30) The TMEP defines "merely descriptive" marks as those that "immediately convey knowledge of a quality, feature, function, or characteristic of an applicant's goods or services." (31) Nevertheless, section 2(f) of the Lanham Act provides that a descriptive mark may be protectable if it has secondary meaning, and thus, acquired distinctiveness. (32) This refers to a descriptive term's acquired significance by the consuming public, which now understands that the term refers to a product produced by a specific manufacturer, due to that party's consistent and longstanding use of the term with its products. (33) For registration purposes, the U.S. Court of Appeals for the Federal Circuit requires an applicant to prove secondary meaning by a preponderance of the evidence. (34) This burden of proof can be established by both direct evidence and circumstantial evidence. (35) Direct evidence, which some circuits state is the most persuasive evidence of secondary meaning, refers to testimony from buyers as to their state of mind; it can consist of testimony of random buyers in court or professionally-conducted consumer surveys. (36) If direct evidence is unavailable, applicants can also prove secondary meaning using circumstantial evidence of their efforts in advertising the mark. (37)

      Next on the Abercrombie spectrum are suggestive terms, which are defined as any "mark which suggests, but does not directly and immediately describe, some aspect of the goods or services." (38) Proof of secondary meaning is not necessary for suggestive terms, and therefore, the stakes in determining whether a term is descriptive or suggestive are high. (39) Courts have often applied an "imagination" test to make this determination, which provides that "[a] term is suggestive if it requires imagination, thought[,] and perception to reach a conclusion as to the nature of the goods" and "[a] term is descriptive if it forthwith conveys an immediate idea of the ingredients, qualities[,] or characteristics of the goods." (40) Finally, arbitrary or fanciful terms are completely nondescriptive of the product to which the mark is attached, and therefore do not require any determination as to whether a mark is "merely descriptive." (41) Like suggestive marks, arbitrary or fanciful terms are treated as "inherently distinctive," and thus can obtain trademark protection without any proof of secondary meaning.

   4. USPTO Registration Process and Benefits

      As previously stated, while the U.S. trademark system is "use-based" rather than "registration-based," registration of a mark provides significant benefits. (42) First, section 7(c) of the Lanham Act confers nationwide priority in the mark as of the date of application, subject to some limited exceptions. (43) Second, registration also creates "prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce."...