Texas Business Lawyer

After years of hard work, you find your business has taken off: revenues are climbing, first time customers have become repeat customers, and rumors of your quality workmanship and services have spread throughout the community, including the online marketplace.  In today’s world, however, opportunities abound for the unscrupulous to damage your trademark and unjustly profit off of your efforts.  The internet has exploded as an unregulated communicative medium, and as a consequence the rise of e-piracy, cybersquatting, and fraud have followed.  Specifically, many businesses will fall victim to imitators who will register similar domain names or alter their metatags in attempt to divert your clients to their website.

Cybersquatters are not innocuously mischievous.  They represent a real threat by both diverting your legitimate business revenues to their websites and affecting your organic presence on internet search engines such as Google or Yahoo, to name the most prominent.

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The Vethan Law Firm P.C.’s attorneys are experienced in trademark litigation, focusing our efforts on protecting the trademark rights of American businesses.  Often times, we can end the harmful activity with a simple “cease & desist” letter to the infringing party.[2]  However, if the behavior continues, we are willing and able to take steps to protect your business presence.

[1] The Lanham Act, 15 U.S.C.A. § 1125 (2006).

[2] Karl F. Jorda, Patent Infringement Litigation: The US Experience, Pierce L. Publ’n & Papers, at http://www.ipmall.info/hosted_resources/pubspapers/jorda_03_23_99.asp (last visited June 3, 2008).

Common law trademark rights arise from use of the mark in commerce. The first business to use a mark in a geographically defined area generally obtains certain common law rights to the trademark, and may designate the mark with a “TM.”  Registration is not a prerequisite to obtaining a common law trademark.  Rather, the first person to use a mark in commerce usually takes priority over all subsequent users with respect to use of the mark within a defined geographic area.  The first person to use the mark in commerce is generally referred to as the “Senior User.” The Senior User of the trademark, even though it did not register the trademark, still may use that mark to the exclusion of all other “Junior Users” who subsequently use the same mark in the same (shared) geographic area. These common law rights also extend into a natural zone of expansion, in surrounding geographic areas that are considered a natural and logical expansion of the Senior User’s business, in adjacent markets.

The concept of common law trademarks can be traced to two significant cases:  Hanover Star Milling Co. v. Metcalf [1](”Tea Rose” case) and United Drug Co. v. Theodore Rectanus Co.[2]  Both cases address the fact that the junior uses acted in good faith.  These cases, and their progeny, created a general rule that trademark rights established through use extend only into the markets where the mark has become “known and identified,” and rights do not go beyond the reach of the actual goods on which the mark is used.  So, when does infringement of the mark occur?

The Lanham Act sets the standard for infringement as use of a mark “in connection with the sale, offering for sale, distribution or advertising of goods or services likely to [cause confusion or deception].” Courts require more than registration of a domain to be construed as use in commerce. A domain name, per se, is not a trademark. It is typically called a “quasi-trademark” as it is a central point of contact, expands the reach of a brand, and hold value for the owner. [3]

Should not the internet, then, be considered a ‘commercial space’ for trademarks?  Why, is on line commerce on the internet any different that commerce limited to a geographic area, as is customarily analyzed in common law trademark disputes? The United States Patent and Trademark Office (USPTO) announced that a domain name may be registered as a trademark when: an Internet domain name that is used to identify and distinguish the goods and/or services of one person, from the goods and/or services of others, and to indicate the source of the goods and/or services may be registered as a trademark in the USPTO.  As such, it should follow that the use of a business name (as a URL) on the internet should qualify for common law trademark protection.

It was not too long ago that President Clinton predicted that “We are on the verge of a revolution that is just as profound as the change in the economy that came with the industrial revolution. Soon electronic networks will allow people to transcend the barriers of time and distance and take advantage of global markets and business opportunities not even imaginable today, opening up a new world of economic possibility and progress.”[4]

It may be argued that we have arrived at that point.  Given the vast expanse of business on the internet, it seems at odds that protecting one of the primary assets of a business – it trademarks – has not been squarely and uniformly addressed by courts.

[1] 240 U.S. 403 (1916).

[2] 248 U.S. 90 (1918)

[3] See Academy of Motion Picture Arts & Sciences v. Network Solutions, Inc., 989 F. Supp. 1276, 1279 (C.D. Cal. 1997); Lockheed Martin Corp. v. Network Solutions Inc., 985 F. Supp. 949, 957 (C.D. Cal. 1997).

[4] Securities Law & The Internet: Doing Business in a Rapidly Changing Marketplace A Framework for Global Electronic Commerce, 1128 Practicing Law Institute 509, at 511 (1999).

Trademark Protection is Essential for Growing Businesses.

Every successful business seeks to develop a reputation in the marketplace. A reputation that identifies a business’ exemplary products and services, and creates an actual or perceived value in a product or service, is a valuable asset to a business. Companies like General Electric – with arguably the most recognizable trademark in the world - has built a reputation for that trademark over many, many years. Would Coca Cola be as valuable a commodity without its logo, a BMW without its famous propeller against a blue sky, or a McDonald’s restaurant without its signature Golden Arches? In each of these instances, a logo or trademark immediately apprises a consumer of the quality of product offered, and in each of these instances, the company that owns the famous mark has spent tens of millions of dollars to develop an affiliation between a product and its quality in the mind of the consumer.

Similarly, a growing business must take steps to protect its brand – its marks, logos, and names that they have used in commerce. In fact, during the initial growth phase of a business, a trademark takes on greater value, as it distinguishes a business from its competitors, and begins the process of building brand affiliation in the relevant market. Unfortunately, trademark litigation involves situations where an infringer attempts to free ride on the name and marks of a more successful, established business. The harm is greater that diverted revenues. The significant harm results when an infringer dilutes the value of an established trademark or logo in the marketplace, creating a likelihood of confusion between the existing mark and the infringer’s mark.

When a business approaches its aggressive growth phase, it is essential that its trademarks, logos, and other intellectual property be protected, and the business takes all reasonable measures to prevent infringers from usurping a quickly recognizable mark.

The lawyers of Vethan Waldrop, PLLC works closely with its clients to obtain trademark protection and take swift action to prevent theft or infringement of our client’s intellectual property.