is the Founder and Owner of Chiacchio IP, LLC, a law firm that specializes in intellectual property law. Mr. Chiacchio has been practicing intellectual property law for over 15 years. He regularly prepares and prosecutes U.S. patent and trademark applications. Mr. Chiacchio counsels clients regarding a wide range of intellectual property issues, including patent, trademark, copyright, and trade secret issues. Mr. Chiacchio prepares cease-and-desist letters for clients whose intellectual property rights are being infringed or misappropriated. Mr. Chiacchio has also spent well over a decade litigating intellectual property disputes on behalf of his clients. He has served as lead trial counsel in federal trademark infringement, copyright infringement, and trade secret misappropriation litigation; and has played an integral role in five patent infringement trials.
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When examining trademark applications, the U.S. Patent and Trademark Office (USPTO) assesses whether the applied-for trademark presents a likelihood of confusion among consumers as compared to other registered U.S. trademarks. In making this determination, the USPTO considers a list of factors first laid out in In re E. I. du Pont de Nemours & Co. 476 F.2d 1357 (C.C.P.A. 1973), commonly referred to as the Du Pont factors. One of the Du Pont factors is the number and nature of similar marks in use by third parties on similar goods or services. Id. at 1361. This article examines the significance of third-party usage evidence to a likelihood of confusion analysis.
Under the Lanham Act, a trademark is any combination of words, names, symbols, or devices that are used to identify and distinguish goods or services and to indicate their source. Am. Express Co. v. Goetz, 515 F.3d 156, 159 (2nd Cir. 2008). Therefore, a trademark, in order to be deserving of protection as such, must be used in such a manner that it designates the source of the goods or services (even if that source is unknown). 15 U.S.C. § 1127. (Unless otherwise indicated, references to “trademarks” are intended to encompass “service marks” as well.)
Deciding whether or not to enforce one’s intellectual property rights is a significant decision for any business (or individual). Litigation in general tends to be an expensive proposition and intellectual property litigation ranks toward the top with regard to average cost. While the average total cost of U.S. trademark infringement and copyright infringement litigation varies depending on the nature of the case and the stakes involved, such costs (i.e., attorneys’ fees and third-party costs) average in the $300,000-$500,000 range. Patent infringement litigation is typically even more expensive. Intellectual property enforcement decisions therefore must be made with care, taking into consideration all relevant legal, financial, and other business considerations. This article discusses the considerations affecting intellectual property enforcement decisions through the prism of two examples: T-Mobile’s trademark rights in the color magenta and the very popular Baby Yoda GIFs that seem to be everywhere online. Both companies recently experienced considerable backlash when IP enforcement of these rights went wrong.
In order for rights in a trademark to persist, the mark must be used in commerce continuously. Wallack v. Idexx Labs., Inc., No. 11CV2996-GPC(KSC), 2015 WL 5943844, at *4 (S.D. Cal. Oct. 13, 2015). Abandonment of a mark is, therefore, an affirmative defense to a trademark infringement claim. One form of trademark abandonment is non-use of the mark. A second form of trademark abandonment is uncontrolled or “naked” licensing of one’s trademark. The policy behind prohibiting uncontrolled licensing is reflected in 15 U.S.C. § 1127, which states that “[a] mark will be deemed abandoned … [w]hen any course of conduct of the owner, including acts of omission as well as commission, causes the mark to … lose its significance as a mark.” 15 U.S.C. § 1127 (emphasis added); Already LLC v. Nike Inc., 568 U.S. 85, 99 (2013). “Naked licensing is an uncontrolled licensing of a mark whereby the licensee can place the mark on any quality or type of goods or services, raising a grave danger that the public will be deceived by such a usage.” Doeblers’ Penn. Hybrids, 442 F.3d at 823 (internal quotations and citations omitted). The way to protect against this danger to the consuming public is to require the licensor to actively police use of the licensed mark.