Chapter 1-12 Intellectual Property—Common Law Trademark Infringement

• Jurisdiction: United States

1-12 Intellectual Property—Common Law Trademark Infringement

1-12:1 Introduction

Similar to statutory trademark infringement under the Lanham Act or the Texas Trademark Act, a Common Law Trademark Infringement suit protects a person's ability to distinguish his goods and services from others' goods or services by eliminating similar uses which might prove confusing, deceptive, or dilutive. In fact, the issues in a Common Law Trademark Infringement suit under Texas law are no different than a trademark infringement suit under federal law.³¹⁴ The elements in common law trademark or service mark infringement under Texas law are the same as those under federal trademark law.³¹⁵

MUST READ CASES

Union Nat'l Bank of Tex., Laredo, Tex. v. Union Nat'l Bank of Tex., Austin, Tex., 909 F.2d 839 (5th Cir. 1990)

All Am. Builders, Inc. v. All Am. Siding of Dallas, Inc., 991 S.W.2d 484 (Tex. App.—Fort Worth 1999, no pet.)

Zapata Corp. v. Zapata Trading Int'l, Inc., 841 S.W.2d 45 (Tex. App.—Houston [14th Dist.] 1992, no writ)

1-12:2 Elements

(1) The proposed mark is eligible for protection

• The proposed mark is eligible for protection.³¹⁶
• Whether a proposed mark is eligible for protection turns on which of four categories it belongs in:

• Arbitrary/Fanciful;
• Suggestive;
• Descriptive; or
• Generic.³¹⁷

• The categorization of a proposed mark is a question of fact³¹⁸ which seeks to answer where on the spectrum each proposed mark lies.³¹⁹
• Arbitrary and suggestive marks are given the greatest amount of protection because they are distinctive; they require no proof of secondary meaning.³²⁰
• Descriptive terms are only eligible for trademark protection if they have developed secondary meaning.³²¹

• In order to establish secondary meaning, the plaintiff must show that the primary significance of the term in the minds of the consuming public is not the product but the producer.³²²

• Generic terms are not eligible for trademark protection.³²³

(2) The plaintiff is the senior user of the mark

• The plaintiff is the senior user of the mark.³²⁴
• The first person to use the mark is deemed to be the senior user. Registration of a mark is not determinative.³²⁵

(3) There is a likelihood of confusion between the plaintiff's mark and that of the other user

• There is a likelihood of confusion between the plaintiff's mark and that of the other user.³²⁶
• Whether a defendant's use is likely to deceive or cause confusion is a factor-based test which looks to:

• The category of trademark;

• Arbitrary, Suggestive, Descriptive, or Generic;

• The similarity of design;
• The similarity of the products;
• The identity of retail outlets and purchasers;

• The identity of advertising media utilized;
• The defendant's intent;
• Whether actual confusion occurred.³²⁷

• A finding of likelihood of confusion does not need to be supported by a majority of these factors.³²⁸
• Parody is an additional factor to consider regarding whether a likelihood of confusion exists.³²⁹

(4) The likelihood of confusion will cause irreparable injury for which there is no adequate legal remedy

• The likelihood of confusion will cause irreparable injury for which there is no adequate legal remedy.³³⁰
• Likely damage to the plaintiff's goodwill and reputation are sufficient to prove irreparable injury.³³¹

1-12:3 Damages and Remedies

1-12:3.1 Injunction

The exclusive remedy for common law Trademark Infringement is an injunction. A successful plaintiff may only enjoin a defendant from use in areas where he is currently doing business and areas he is likely to expand into.³³²

1-12:4 Defenses

1-12:4.1 Statute of Limitations

The two-year limitations period controls.³³³

Trademark infringement is a continuing tort.³³⁴

1-12:4.2 Laches

Laches is an available affirmative defense.³³⁵

Laches consists of three elements:

1. An unreasonable delay in asserting a right or claim;

2. That is not excused; and

3. That results in undue prejudice to the defendant.³³⁶

1-12:4.3 Abandonment

Abandonment of a trademark is a defense to a common law Trademark Infringement suit.³³⁷

Abandonment is established by proof:

• That the plaintiff discontinued use of the mark; and

• Intended to abandon the mark.³³⁸

1-12:4.4 Acquiescence

Acquiescence is an available defense.³³⁹

Acquiescence occurs if the plaintiff makes implicit or explicit assurances to the defendant which induces the defendant's reliance.³⁴⁰

1-12:4.5 Fair Use

Fair use is an affirmative defense.³⁴¹

Fair use allows for:

• The ability of a copyist who legally copied to tell the public that he has copied;³⁴² and
• The ability of a person to compare his goods and services with that of the mark-holder.³⁴³

Fair use is limited by these principles:

• The defendant may only use so much of the mark as is necessary to identify the product or service; and
• The defendant may not do anything that suggests affiliation, sponsorship or endorsement by the markholder.³⁴⁴

Federal and Texas statutes provide more...