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| Chilling Effects Clearinghouse > Trademark > Notices > Honda Says "Show Me The Money!" (NoticeID 4277) | Location: https://www.chillingeffects.org/trademark/notice.cgi?NoticeID=4277 |
June 13, 2006
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Sender Information: |
Recipient Information:
[Private]
eautoworks.com
San Leandro, CA, 94577, US
Sent via: FAX
Re: Sale of Counterfeit Honda / Type-R Products
This Law firm represents American Honda Motor Co., Inc. (?Honda?) on intellectual property and trademark enforcement matters. Although Honda remains willing to resolve this matter amicably, Honda has referred this matter to us to initiate litigation in federal district court if you do not agree in writing to cease selling counterfeit Honda products and to provide an accounting for your past sales. HONDA?, ACURA?, INTEGRA TYPE-R?, and TYPE-R, as well as the design trademarks or logos that correspond to those trademarks, are some of the trademarks owned by Honda. In addition, Honda owns common law trademark rights in these marks and others. The sale of goods that display Honda trademarks, or any confusingly similar variations thereof, without Honda?s express authorization violates state and federal law, is misleading to the public, and constitutes a misappropriation of the goodwill and reputation developed by Honda. In letters to you from Honda?s law department dated May 19, 2004, June 11, 2004, June 24, 2004, and August 27, 2004, you were notified that your sale of various auto accessories bearing counterfeits of Honda?s H EMBLEM? and TYPE-R design trademarks or logos, including various emblems and map lights, infringes Honda?s trademark rights and asked to cease. While you appear to have ceased offering the infringing merchandise for sale on your website, you have not accounted for your past infringing sales. Honda will not consider this matter resolved until it has received a written commitment from you that you will cease any sale or offer for sale of such goods and that you will promptly, provide a complete and accurate accounting of your past infringing sales, as specified in the letter agreement attached below, including copies of supporting documentation such as, for example, invoices showing your purchase of the unauthorized goods. Honda requires that you sign and return the below-attached agreement to me by no later that November 24, 2004. If I have not received a signed copy of the agreement from you by the close of business on that day, including the required information, products, payment, and documents. I will infer that you are unwilling to resolve this matter voluntarily and will advise Honda to file a complaint against you in United States federal district court. You may be infringing Honda?s rights in other ways, and Honda reserves the right to bring to your attention other matters that Honda believes infringe its rights. This letter is sent without prejudice to all rights of Honda, including past or future royalties, past or future damages, attorney?s fees, and to bring enforcement actions for all past or future violations of Honda?s rights. Should you have any questions concerning Honda?s position in this matter, please do not hesitate to contact me. Sincerely, AGREEMENT By execution of this Agreement, the undersigned agrees immediately to cease and desist from all unauthorized uses of Honda copyrights, trademarks, trade dress rights, and intellectual property rights in its products, services, advertisements, promotional literature, promotional telecasts, broadcasts, and signage, on the Internet, or otherwise, in connection with the advertisement or sale of any product, part, good, or service. Specially, by way of illustration and without limiting the general agreement expressed above, the undersigned agrees that it will: (2) immediately cease and desist from the sale of any products bearing counterfeits of any Honda trademarks. (3) provide the following information by no later than November 24, 2004: a) The number of products set forth by item sold or distributed using or bearing any Honda trademark without authorization; b) The gross revenue received from the sale of such products set forth by item (e.g., JDM Style H Emblem, Type R Interior map Light); c) The time period during which such products have been offered or sold; d) The names and addresses of all non-retail purchasers of such products and the number of each product listed by item purchased by each such purchaser; and e) The names and addresses of any suppliers of the products and which product each supplier supplies. (4) by no later than November 24, 2004, pay Honda by cashier?s check a royalty in the amount of fifteen percent (15%) of the gross revenues from the sales of any products using or bearing any Honda trademark without authorization for the past five years (i.e. from September 1, 1999 through the present). (5) by no later than November 24, 2004, turn over to Honda for destruction all products bearing counterfeits of any Honda trademarks, variations of any Honda trademarks, or trade dress. The undersigned further agrees and acknowledges that any violation or breach of
[private]
(1) immediately discontinue any use or display of any Honda trademark or trade dress, or any marks that are confusingly similar to any Honda trademark or trade dress, on or in connection with the manufacture, marketing, or sale of any service or product in commerce (including without limitation any emblems, badges, drink holders, or grills), or advertisement for any such service or product in any form or media, that has not been approved by Honda in writing.
this Agreement will cause irreparable harm to Honda, and that Honda will be entitled to both a preliminary and permanent injunction against the undersigned for any violation of this Agreement, as well as any other remedy allowed by law. The undersigned further agrees that if it breaches this Agreement, it will pay all costs incurred by Honda in enforcing this Agreement, including reasonable attorney?s fees, whether incurred with or without suit or before or after judgment.
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Question: What is the bare minimum of trademark law that I have to understand to decipher this C&D? Answer: Your opponent should say that your mark is causing consumer confusion or is likely to cause consumer confusion. Or it should mention it's famousness and complain of dilution or tarnishment. (If the C&D does not say this, then no trademark claim may actually exist, and you can rest assured that your opponent is engaging in scare tactics or has hired a highly incompetent attorney). A mark protects more than identical copying, it extends to anything that is confusingly similar, even if it isn't exactly the same. Functioning in a quasi-magical talisman-like capacity, trademarks designate the source or quality of goods or services. For this reason, the law protects against confusion in the market place by ensuring that marks on the same or similar products or services are sufficiently different. The law also protects famous marks against dilution of value and tarnishment of the reputation of the goods or services on which it appears or the source of those products, regardless of any confusion. You can roughly assess the validity of your opponent?s claim of confusion by classifying the marks involved. A trademark can fall into one of 5 categories. It can be: (1) fanciful; (2) arbitrary; (3) suggestive; (4) descriptive; or (5) generic. Not all of these varieties of marks are entitled to the same level, or indeed any level, of trademark protection. A fanciful mark is a mark someone made up; examples include KODAK or H?AGEN-DAZS. An arbitrary mark is a known term applied to a completely unrelated product or service; for instance, AMAZON.com for an online book-store cum one-stop shopping site or APPLE for computers. Fanciful and arbitrary marks are considered strong marks and garner substantial trademark protection. A suggestive mark is one that hints at the product, but which requires an act of imagination to make the connection: COPPERTONE for sun tan lotion or PENGUIN for coolers or refrigerators are examples. Suggestive marks are also strong marks and receive protection. A descriptive mark, predictably, describes the product: HOLIDAY INN describes a vacation hotel and FISH-FRI describes batter for frying fish. Descriptive marks do not receive any trademark protection unless their user has used them in commerce and has built up secondary meaning. "Secondary meaning" occurs when consumers identify the goods or services on which the descriptive term appears with a single source. In other words, if consumers know that HOLIDAY INN hotels are all affiliated with a single source, then the mark has secondary meaning and receives trademark protection. Finally, generic marks simply designate the variety of goods involved: for example, "cola" used on soft drinks and "perfume" on perfume are both generic terms. Generic marks never receive any trademark protection; they are free for everybody to use. (Keep in mind, though, that "Cola" on a nightclub is arbitrary, and therefore receives protection). If your opponent is complaining that you have used the word "bakery" for a bake shop or "car" for a car repair shop, then you can safely guess that the c & d is baseless. On the other hand, if your opponent is concerned about the fact that both of you use of the term "Sweet Pickles" on alpaca sweaters, then the c & d may have some merit. There are a few more wrinkles as well. Some marks are word marks (text only) and others are design marks (images which may or may not include text). Design marks do not provide independent protectin for the text incorporated in the design. So if the mark is only a design mark, it doesn't prevent others from using the text so long as they don't copy the design elements. Question: What civil and criminal liabilities may be imposed for trademark infringement? Answer: Under federal law (Lanham Act Section 32), an infringer shall be liable in a civil action by the registrant for certain remedies provided in the Act. One such remedy is an injunction, where a court orders a person who was found to violate the Act to stop its infringing activities. A trademark owner/registrant may also be able to obtain lost profits or damages against a defendant in a civil action only if the acts were committed with knowledge that such imitation was intended to be used to cause confusion, mistake, or to deceive. The trademark owner can recover (1) the domain holder's profits from use of the mark, (2) the trademark owner's damages resulting from harm to the value of mark, and (3) court costs as "actual damages." In determining the award to be paid, the court can choose to award up to three times the amount of actual damages. Instead of having to prove the amount of "actual" damages suffered as above, the mark owner can instead request payment of "statutory damages" from $1000 and $100,000 per domain name. Attorney fees may be awarded in exceptional circumstances, such as when there was a willful and malicious violation. The court can order the cancellation or transfer of a domain registration. In the case of a willful violation of Lanham Act section 43, a court may order that all labels, signs, prints, packages, wrappers, receptacles, and advertisements in the possession of a defendant bearing the registered trademark shall be delivered up and destroyed. Question: What can be protected as a trademark? Answer: You can protect
Question: What are "common law" rights in a trademark? Answer: Common law rights are those that are recognized by courts as a matter of traditional equitable principles and fairness, even when there is no statute or other law that has been enacted by the legislative branch of government to cover the situation. It also arises from the leeway that judges have in interpretating the language of the written laws when the meaning is not clear. Common law is often known as "judge-made" law. Common law is learned by reading the actual decisions made by courts. Question: What exactly are the rights a trademark owner has? Answer: In the US, trademark rights come from actual use of the mark to label one's services or products or they come from filing an application with the Patent and Trademark Office (PTO) that states an intention to use the mark in future commerce. In most foreign countries, trademarks are valid only upon registration. There are two trademark rights: the right to use (or authorize use) and the right to register. The person who establishes priority rights in a mark gains the exclusive right to use it to label or identify their goods or services, and to authorize others to do so. According to the Lanham Act, determining who has priority rights in a mark involves establishing who was the first to use it to identify his/her goods. The PTO determines who has the right to register the mark. Someone who registers a trademark with the intent to use it gains "constructive use" when he/she begins using it, which entitles him/her to nationwide priority in the mark. However, if two users claim ownership of the same mark (or similar marks) at the same time, and neither has registered it, a court must decide who has the right to the mark. The court can issue an injunction (a ruling that requires other people to stop using the mark) or award damages if people other than the owner use the trademark (infringement). Trademark owners do not acquire the exclusive ownership of words. They only obtain the right to use the mark in commerce and to prevent competitors in the same line of goods or services from using a confusingly similar mark. The same word can therefore be trademarked by different producers to label different kinds of goods. Examples are Delta Airlines and Delta Faucets. Owners of famous marks have broader rights to use their marks than do owners of less-well-known marks. They can prevent uses of their marks by others on goods that do not even compete with the famous product. Question: Where can I find state trademark law? Answer: Each state has its own laws governing use of trademarks within its borders. To locate the trademark laws of the 50 states, use the Legal Information Institute links. Both legislation and court opinions create trademark rights and remedies. If marks are used in interstate commerce, then federal law will also apply. Question: Where can I find federal trademark law? Answer: To be protected by federal trademark law, the marked goods and services must be used in interstate commerce. Federal trademark law is known as the Lanham Act. It protects marks that are registered with the United States Patent & Trademark Office as well as those that are in use but never registered. Court opinions and United States Patent & Trademark Office (USPTO) regulations also interpret trademark rights and remedies. See the links to court sites provided by the Legal Information Insitute. Question: What is trademark infringement? Answer: Although different courts have different tests, the central concept is confusion in the marketplace. The law protects against consumer confusion by ensuring that the marks on the same or similar products or services are sufficiently different. A plaintiff in a trademark infringement case generally must prove 1) it possesses a valid mark; 2) that the defendant used the mark; 3) that the defendant used the mark in commerce, "in connection with the sale, offering for sale, distribution or advertising "of goods and services; and 4) that the defendant used the mark in a manner likely to confuse consumers. Question: What does the "reservation of rights" language mean? What are they "waiving" at me? Answer: Many C&Ds will say something like, "This letter shall not be deemed to be a waiver of any rights or remedies, which are expressly reserved." This is just legalese for saying, "Even if you do what we ask in this letter, we can still sue you later." The language is standard; do not be alarmed. Litigation is extremely unpleasant, and unless your opponent is irrational (always a distinct possibility, of course), it will not bring litigation after it has obtained what it wants. |
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