A Trademark Primer for Assessing the Merit of a Cease & Desist Letter You Have Received

1. I have an unsettling feeling in the pit of my stomach about the tone of the c & d I received. Does the tone of the c & d mean I am going to lose this dispute?


2. What facts should a c & d include if it is legitimate?
3. What is a trademark?
4. What is the bare minimum of trademark law that I have to understand to decipher this c & d?
5. Does the product or service on which I am using my mark matter?
6. Does the date on which I started using my mark matter?
7. What do these registration numbers mean? or Why don’t I have any registration numbers in my c & d?
8. I do not know what these cases or statutes cited in the c & d mean.
9. The c & d is asking me to do a bunch of things I don’t understand.
10. What is the Anti-Cybersquatting Consumer Protection Act?
11. What does the “reservation of rights” language mean?
12. Where can I find an attorney?
    

    You are likely reading this after you have breathlessly opened an envelope with law firm letter head on the exterior and read with increasing dismay a letter that in a vulgar tone accuses you of foul and immoral acts. If so, congratulations. You have come to the right resource.

    This primer explains trademark law as it dissects the anatomy of an average cease and desist letter (“c & d”). Most trademark c & ds have at least one, and perhaps all, of the following six elements: (1) gorilla chest thumping; (2) recitation of facts; (3) citation to cases and statutes; (4) a laundry list of potential remedies; (5) mention of the Anti-Cybersquatting Consumer Protection Act; and (6) a reservation of rights.

1.     Gorilla Chest Thumping

    “Gorilla Chest Thumping” refers to the tone of most c & ds: it’s nasty. The first thing to do is take a deep breath. The second thing to do is to acknowledge that the tone of the letter is a function of the letter writer’s perception that aggression is the best defense: do not take it personally. The third thing to do is ignore it. You may eventually choose to respond aggressively yourself, but do not do so because your opponent has egged you into a useless game of whose gorilla is bigger. Take a tip from Ani Di Franco: “If you play their game, girl, you’re never gonna win.” “Face Up and Sing,” Out of Range, Righteous Babe Records (1994).

2.     Recitation of Facts

    Read this section of the letter carefully. It should contain some or all of the following information: (1) the trademark that is allegedly being infringed; (2) the trademark that is allegedly doing the infringing; (3) the products and services on which your opponent uses the allegedly infringed mark; (4) the date your opponent commenced such use; and (5) the registration numbers, if the trademarks are registered with the Patent & Trademark Office.

3. and 4.     The Marks Involved

    The c & d should identify your opponent’s trademark, as well as your own. How do you know what the trademarks involved are? A trademark can be any word, symbol, picture, phrase, sound, or sign (in the sense that semioticians use the term) that identifies and distinguishes products or services.

    Your opponent should say that your mark is causing consumer confusion or is likely to cause consumer confusion. (If the c & d does not say this, then no trademark claim exists, and you can rest assured that your opponent is engaging in scare tactics or has hired a highly incompetent attorney). 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 against dilution of a famous mark -- that is, a use of the mark that tarnishes the reputation of the goods or services on which it appears or the source of those products. 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 HÄAGEN-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.

5. and 6.     Products, Services, and Date

    The c & d should disclose your opponent’s products and/or services and the date on which it commenced use of the allegedly infringed mark. This will help you guesstimate whether a likelihood of confusion between the marks exists. For instance, if your opponent uses “opera” on truffles and you use “opera” on silk gloves, consumers are not likely to confuse the products.

    The date on which your opponent began using the mark is significant because junior users cannot displace a senior user in the senior user’s geographic region. In other words, if you have owned a chain of donut shops called “Lucky Donuts,” with locations in New Jersey, New York, and Connecticut, since 1943, a national chain called “Lucky Donuts” founded in 1979 has no trademark infringement claim against you in the NJ-NY-CT tri-state area. If your opponent has begun using its allegedly infringed mark after your use, you have another reason to question the merit of the c & d.

7.     Trademark Registration Numbers

    Do not be led astray by the registration numbers: trademark rights in the United States arise from use of the mark in commerce, not from registering. However, both state and federal law can provide relief from trademark infringement. If your opponent has registered its mark on the Patent & Trademark Office’s register, then you know that litigation about the mark could occur in federal court. If your opponent has not included any registration numbers, you still could be sued in federal court, but your opponent might simply be relying on state law (or just trying to scare you). If the c & d does not reveal any registration numbers, you should ask if the marks are registered.

    If the opponent has included registration numbers, look them up on the Patent & Trademark Office’s website: www.uspto.gov. Click on “Trademarks” on the left hand menu, and then click on the Trademark Electronic Search System (“TESS”). You can check the status of a trademark by entering the registration number into TESS’s search engine. If your opponent’s trademark is labeled “LIVE,” then it is likely to be protected by federal law; if TESS labels the mark “ABANDONED,” then you have reason to believe that federal law will not protect it (although even abandoned marks can garner protection in some instances).

8.     Citation to Cases and Statutes

    If your opponent has cited cases and statutes in the c & d, do not freak out. The fact that your opponent can include some legal authority in the c & d does not mean that the law is on its side. If you can, go look up the cases and statutes to see what they say. You can go to the nearest law school’s law library for help, or you can try a free legal resource web site like www.findlaw.com.

    If your opponent is relying on federal law, it will probably cite one or more of the following sections of the Lanham Act: (1) section 32 (also known as section 1114); (2) section 43(a) (a/k/a section 1125(a)); or (3) section 43(c) (a/k/a section 1125(c)). (The smaller numbers indicate how the statutory sections were numbered when the law was a bill in Congress; the larger numbers indicate how the statutory sections were re-numbered when the law was codified in the U.S. Code. Under either numbering system, the laws say the same thing).

    Section 32 (codified as 15 U.S.C. 1114) is the basic statute governing trademark infringement of registered marks. If you use a mark in commerce that is confusingly similar to a registered trademark, you may be civilly liable under section 32.

    Section 43(a) (codified as 15 U.S.C. 1125(a)) is the “false designation of origin” statute. If you use a mark in commerce that is likely to cause confusion or deception as to affiliation, association, origin, or sponsorship with another trademark, you may be civilly liable under section 43(a). Section 43(a) does not require that any of the marks be registered.

    Section 43(c) (codified as 15 U.S.C. 1125(c)) is the “dilution” provision. This section allows the owner of a famous trademark to prevent use of the mark by junior users whose use “dilutes” the distinctive quality of the famous trademark. In other words, if someone tries to sell “KODAK pianos,” KODAK could stop the person -- even if consumers were not confused -- because KODAK is a famous mark, and its use on products other than film and film-printing accessories (or other products on which Eastman Kodak places the mark) dilutes its uniqueness.

    If you identify which statutory provisions on which your opponent relies, you can begin to get a feel for whether the c & d has merit. For instance, if your opponent relies on section 32, but does not disclose a registration number, your first question is: does your opponent have a registered mark? If not, it has no claim under section 32.

9.     Laundry List of Potential Remedies

    Your opponent may describe a parade of horribles to demonstrate with exquisite detail what it will do to you unless you capitulate. This list generally includes, but is not limited to: (1) ceasing use of the allegedly infringing mark or surrendering the domain name; (2) rendering an accounting; (3) posting corrective advertising; (4) obtaining an injunction; (5) recovering costs and fees. Though these things sound awful, they are not medieval tortures (although that may be a function of the fact that Torquemada never thought of them).

    Ceasing use of the mark is self-explanatory: your opponent wants you to stop using the mark. Your opponent might also ask you to surrender your domain name if they believe the domain name causes (or is likely to cause) confusion with their trademark. Under ICANN rules, you may have to surrender your domain name if the following three conditions are satisfied: (1) your domain name is identical or confusingly similar to your opponent’s; (2) you have no legitimate right or interest in the name (in other words, you are not using the name to conduct a bona fide business or for non-commercial fair use purposes); and (3) your name is registered and used in bad faith.

    An accounting basically means that you disclose the following information to your opponent: (1) the date you began using the allegedly infringing mark; (2) the names of individuals who knew of the use when it began; (3) the amount of traffic at your web site or business at your store; and (4) your profits and revenues during the time you used the allegedly infringing mark.

    Corrective advertising means you give notice to the public that you were using a mark confusingly similar to your opponent’s, and that you are not affiliated with your opponent.

    An injunction is a judicial order to do something. An injunction can prevent you from using the allegedly infringing trademark.

    Some provisions of the Lanham Act permit a trademark holder to recover attorney’s fees and court costs from an infringer.

    That your opponent has listed these various remedies does not mean that it is entitled to them; do not confuse the smorgasbord of legal options with your opponent’s right to inflict any of them on you.

10.     Anti-Cybersquatting Consumer Protection Act

    ACPA is aimed at people who register a domain name with the intention of selling it to a trademark owner. For instance, if BURGER KING did not have a web site, and you registered www.BURGERKING.com with the intent of selling the site to BURGER KING, you could be liable under ACPA.

    ACPA applies to people who: (1) have a bad faith intent to profit from a domain name; and (2) register or use a domain name; (3) that is identical, confusingly similar, or dilutive of a trademark. The trademark does not have to be registered.

    ACPA provides that cyberpirates can be fined between $1,000 and $100,000 per domain name for which they are found liable.

    If the c & d threatens liability under ACPA, and you had no bad faith intent to sell the domain name to your opponent, then the threat is empty.

11.     Reservation of Rights

    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.

12.     Conclusion

    This primer is meant as an aid to help you decipher c & ds so you can make informed decisions about your course of action. If, after reading this, you think the c & d you received might have some merit, or you think you might engage your opponent in battle even if the c & d is, in your opinion, baseless, consultation with an intellectual property attorney is always a good idea. You can find an intellectual property attorney at www.martindale.com or by calling your state or local Bar Association and asking for a referral.     

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