CHAPTER 1 - § 1.02

• Jurisdiction: United States

§ 1.02 THE TRADEMARK ACTS OF 1870 AND 1881

The first federal statute that permitted trademark registration was passed in 1870.¹⁷ This law was only in effect for nine years when it was declared unconstitutional in 1879 by the Supreme Court. The reason for this was that the statute included coverage for both intrastate commerce (i.e., commerce within one state) and interstate commerce (i.e., commerce between two or more states), in violation of article 1, section 8, clause 3 of the Constitution.¹⁸ Section 8 of the Constitution states that Congress has the power to "regulate commerce with foreign nations, and among the several states, and with the Indian Tribes."¹⁹ Thus, intrastate commerce was not controllable by Congress. In supporting this ruling, the Supreme Court stated that "Congress's power to regulate trademarks was limited to an exercise of Commerce power."²⁰ Commerce power was limited to interstate and foreign commerce by the Constitution.²¹ The theory was that there was no specific language in the Constitution granting Congress the power to regulate trademarks, as there was for copyrights and patents.²² For these reasons, the power to regulate trademarks had to be limited to regulation of interstate and foreign activity.²³

In 1881, Congress passed a new statute that sought to avoid this constitutional conflict. The Trademark Act of 1881 allowed for the registration of marks only used in commerce with foreign nations and Indian tribes, but not intrastate commerce or interstate commerce.²⁴ Not surprisingly, many found that the 1870 and 1881 Trademark Acts were inadequate means for protection of trademarks (and trade dress) because at that time only a small subset of products were being sold in international trade channels. Accordingly, common law unfair competition claims remained the primary means for resolving trademark and trade dress disputes.

One of the first cases explicitly drawing a distinction between trademark, unfair competition, and trade dress was Coats v. Merrick Thread Co., decided in 1882.²⁵ This case followed the common law tradition by focusing on secondary meaning and consumer confusion to determine whether a trade dress violation was present.²⁶ The plaintiffs had been manufacturing thread in Paisley, Scotland, under the name J&P Coats since 1830.²⁷ In 1840, the plaintiffs placed the thread on the market in the United States, and around 1867 they started manufacturing thread in Rhode Island due to consumer demand.²⁸ Prior to the...