What Constitutes Practically Actionable Use of a Trade Mark in E-Commerce - Assignment Example

Name College Instructor Course Date What constitutes practically actionable ‘use’ of a trade mark in e-commerce? Background of Trademark Law For many years merchants and manufacturers use trademark to denote the origin of products or services that are supplied to the market. A manufacturer uses a trademark to show the origin or ownership of products in order to differentiate it from similar products that may be available in the market (Dannay, 1987). The trademark law was therefore enacted to protect the identification of products in relation to their origin. Besides the function of protecting the originality of products, trademarks also serve many more function. The use of trademark assures the consumers of consistency in quality because the manufacturers are always willing to protect the reputation their products in the market. Trademark is used as a guarantee of specific characteristics that apply to certain products and services.Merchants also use trademarks as a marketing tool for their products. This is however applicable when the quality of products being sold are of high quality so as to attract consumers. The issue of ‘trademark use’ has become fundamental in reaching out for the right of trademark owners on the internet. Trademark infringement involves and individual or a company using a competitor’s mark, ether a word, symbol, or anything similar, in the display or advertisement of its own goods. This creates confusion to the consumers as it is not easy to tell the source of the goods or services being advertised or sold. When such a situation happens, the defendant engages in ‘trademark use’ of either the word or symbol by associating it with goods or services being offered for sale so that consumers may depend on that information about the source of the products. Before the internet was introduced the issue of trademark infringement was a rare occurrence. With the introduction of internet, many ingenious individuals and businesses are able to promote their products through the websites by using unauthorized trademarks from others. Historical Roots of the ‘trademark use The development of a trademark was upon the realization that consumers needed to have a means for differentiating goods from competing manufactures and service providers. When consumers identify with specific trademarks, they are able to make their choices according to their preferences and tastes (Greenbuam 1990, p. 45). Each manufacturer or a producer is mandated by law to have a certain trademark, word, or symbol that signifies that certain goods are from a specific manufacturer. Once a producer identifies with a certain trademark it becomes unlawful for any other producers to adopt a similar trademark because it will confuse the customers leading them to make mistaken purchases of goods and services. When merchants are given exclusive rights for their marks has numerous benefits. The consumers are able to trace the goods the want without incurring much costs in searching. When consumers are able to identify what they want easily, market efficiency is improved and time wastage is avoided. Consumers are also protected from deceptive activities such as purchase of goods or services from unreliable and fraudulent sources. By use of trademark, producers are given a chance to maximize the benefits from their investments. A trademark acts as an incentive for the producers to work towards establishing quality goods that can be associated with them. ‘Trade name’ refers to the name adopted by an individual or business to represent goods or services that are rendered by the said business or individual. Other competitors are prohibited from using the same name. This assists in the elimination of unfair competition. The law also recognizes trademarks as exclusive rights that allow a producer to enjoy monopoly in the supply of certain goods or services. A single producer, who uses a geographical name as a trademark, denies other businesses the benefits associated with the production of goods that may have a name associated with that region. Some trademark rights might be too generous to the owners by prohibiting others from using or referring to a certain trademark even during comparative advertising (Greenbuam 1990, p. 52). They might also prohibit any nature of criticism towards the represented products and services, by either the competitors or unsatisfied consumers who might be denied a chance to refer to the said products in any negative manner. This may impair competition resulting to the market dominance by certain producers. While developing the common law, the American courts addressed all these concerns by coming up with the causes of action in regulating the use of trademarks by companies or individuals. The courts also determined the cause of action to take when there is an infringement of a trademark use.The need for ‘trademark use’ in the contemporary society came as a result of the initiation of the law of technical trademark infringement. This law required the plaintiff to demonstrate how the defendant has infringed the trademark fro the products being offered for sale. In addition, the doctrine of the ‘fair use’ was as a result of unfair competition that was caused by the infringement of trademark by another company or an individual. This doctrine is a representation of the courts’ attempt to protect companies or producers against the misuse of their trademarks by their competitors. This is largely because most of the competitors claim to have applied the second meaning of the trademark. The unfair competition cause of action for secondary meaning mark infringement The early law did not give merchants the exclusive rights for using words or symbols, or their combination to describe their products by either using the geographical origin, or by using a surname. Many of the players in the business market would want to use words and symbols to deliver some form of communication to their consumers about the qualities of goods or services being offered. The strength of their presence in the market depended on their effectiveness in using trademarks to describe their goods. The early common law allowed the free use of such words and symbols by all the players in the market. The explanation for this was that the application of language to express its truthful meaning outweighed the concerns of creating confusion among the consumers of the products that might uses descriptive words as a form of trademark. The courts however acknowledged that confusion could be created among consumers through the concurrent use of surname, symbols or words by a competitor especially when they insisted to use them in marketing of their products for a long duration. Consumers tend to associate the names or symbols used by the competitor an indication that the product or services being offered through those names have some association with their original user. In this case the court realized that the words or symbols used could have a “secondary meaning” of indicating the origin of goods other than the natural descriptive meaning. In such a scenario where words acquired secondary meaning, the courts would intervene so long their intervention did not interfere with the use of language to express true common description. The courts reasoning was that common law allowed the competitors to use descriptive words, surnames, and symbols in their original meaning that is commonly accepted by all. However, the law did not allow the competitors to use the same words or symbols with an intention of committing fraud. In an event where the competitors used descriptive words or symbols to denote the source other than for descriptive purposes with an intention of creating confusion among the consumers, the courts were obligated to intervene. This form of intervention was not because the plaintiff had the exclusive rights for the use of the descriptive words or surnames, but because the competitor (defendant) had engaged in that misconduct with ill intention which would culminate to unfair competition. The court’s cause of action for the infringement of the secondary meaning trademarks was intended to prevent consumer uncertainty of the products’ origin, prevent deliberate misconduct, and to retain the general accessibility of descriptive words and symbols in the market. The issue of using descriptive words for “secondary meaning” or for “fraudulent intent” was frequently seen to be overlapping as it reflected two sides of the same coin. As time progressed into the twentieth century the courts in United States started challenging and criticizing the fraudulent intent clause. With the reasoning that the infringement of the trademark and the infringement of the secondary meaning caused the same damage to a business as they both intended to confuse the consumer. It was also argued that all infringement cases should concentrate more on the consequences of an infringement in a business other than on the intent. There was need to merge the two causes of action that is; the infringement of trademark and unfair competition. When it came to the use of surnames, the common law viewed this differently than the use of words or symbols as a form of a trademark. In the case of using surnames as a trademark, the courts wanted to find out the individual persons, interests in using their surnames in their businesses other than using other forms of trademark.. The Technical Trademark Infringement Cause of Action The common law recognized “Technical Trademarks” as distinctive symbols or words that were unique and on-descriptive in nature that a merchant physically affixes to his products. While designing the cause of action for the infringement of the technical trademark, the court argued that a business could appropriately use a non-descriptive word or symbol for its exclusive use without causing harm to the competition. A technical trademark according to the courts’ definition was non-descriptive or had no meaning. The competitors therefore had no reason to adopt such trademarks as it could be taken to imply that they are engaging in a fraudulent act towards the owner of the mark and the public in general. Since the protection of the use of technical trademarks did not in any way threaten the competitor’s ability to operate fairly in the market, the courts allowed exclusive rights for the technical trademark owners. For a claimant to be considered to have the rights over a technical trademark, he needs to be the first to ‘affix’ the mark on the products being traded. If a defendant affixes a similar mark, then the court will consider that to be a fraudulent act performed with ill intent of causing confusion to the general consumers of the products. When the court found infringement it banned the defendant from any use of the symbol or words in contention. It was later realized that a technical trademark owner did not have total exclusive rights over the use of the mark. During the 1800’s, the infringement of the technical trademark was only considered when the defendant “affixed” a similar trademark to similar goods. By doing so the defendant would be signaling the source of the products to the consumers. Until the earlier half of the twentieth century, affixation to products remained the only way the primary source would be identified. The “affixation” was relaxed a bit in the 1900’s. The defendants would only be considered to have infringed the use of a trademark if the words or symbols are used “as a trademark,” or in a way that they would indicate the source of the goods to the consumers. In such instances the use of a mark was likely to cause confusion to the consumers and court intervention would be sought. The law of technical trademark was later simplified by consolidating it with the law of unfair competition. The new version provided that, the defendant would be alleged to have been involved in infringement if the technical trademark is used to signify a trade name in way that would specify the source to the consumers (Gilson, 2004). In the restatement, it was suggested that the court should conduct more investigation to understand the consumer understanding of the affixed marks in as may be used by the competitor. The process of drafting a new and comprehensive federal trademark was initiated in 1938 and completed in 1947 when the Lanham Act was enacted in US. Some new ideas were introduced in the new Act where the liberalization of the second meaning marks was elaborated. As proof of a secondary meaning of a trademark, Lanham Act allows the Patent and Trademark Office to accept a continuous use of a trademark for five as evidence of the infringement of second meaning. This act also advocated for a uniform infringement standards of both technical registered trademarks and secondary trademarks. The same cause of action was taken against the infringement of unregistered marks. The area of law that deals with use trademarks and patents in the e-commerce is known as property law. The intellectual laws of copyright, patents and trademarks regulate the ability to access information through the internet. Most countries in the world have their own systems that regulate the use of trademarks. Whereas the regulation of e-commerce largely depends on the contract and commercial laws, the intellectual property laws are very fundamental in the e-commerce business (Stuckey, 1996). Copyrights are essential in protecting the material contents of websites and the information transmitted through the web. Through the use of trademarks business interests are protected across the globe. The nature internet of being transnational is of main concern to the e-commerce. When an order is placed in one country in passes through many other countries before it is received by the destination country where the merchant might be situated. Internet therefore causes a lot of confusion in jurisdictional administration. The creation of the World Wide Web by Tim Berner-Lee in 1992 was a milestone towards the development of e-commerce. By 1884 corporations such as Pizza Hut had started reaping the benefits of e-commerce by taking pizza orders through the web (Spinder, 2002). The introduction of the web browsers facilitated the development of the e-commerce in many countries around the world. One main characteristics of e-commerce is the use of online advertising in order to attract the potential consumers who are located in various parts of the world. One aspect that requires keen attention in the e-commerce is the issue of trademark use and copyright. Anybody engaging in e-business needs to understand the various trademark laws that are applied in different jurisdictions. Copyright an infringement matters need to be understood in the application of the e-commerce advertising (Plotkin & Wells, 2003). The host is liable for infringement. The Lanham Act, 1946, gives guidance about the federal registration and the process for protection of the marks that are used in e-commerce. Application for a registration of a mark is done through the Patent and Trademark Office. According to the Lanham Act, the applicant is supposed to submit a copy of the mark and the belief that the mark cannot be mistaken by consumers. When the mark is registered, the Act gives the remedies against the use of the mark. For one to qualify for remedy awards, the plaintiff is required to indicate that the mark being infringed is legally registered and that the defendant is really using the mark to benefit from some interstate e- commerce. The plaintiff must also be in a position to show that the use of the mark by the defendant is in some way creating confusion I the market by influencing the consumers to believe that certain products belong to the original manufacturer when the reality is different. In US, any business activity that can be controlled by the Congress is a subject to the Lanham Act (International Trademark Association, 1992). The Act considered infringement of the mark when the same mark is used to facilitate business process in the e- commerce through advertising services or direct sales through the internet When the infringing mark is used in the marketing and the sale of goods or their distributing, then the Act supports the application of infringement. The federal court also provides the elements and measures to be used in determining whether the mark is causing any confusion in the market as it could be alleged. It is the through understanding of a confusion that assists in comprehending the extent of the infringement. Confusion can include many business aspects but initially the court was connecting confusion with the origin of the products (Scassa & Deturbide, 2004). A more direct of confusion is that a consumer can buy products from one company with a false belief that those goods are from another company. The Act expanded the meaning to confusion to cover all the prospective customers or the end users. The confusion can also be about the sponsorship of the products in addition to the origin of the products. There are various factors that federal courts follow in determining whether there was likelihood of confusion occurring. The extent of the similarity of the mark being used, the similarity of the services being offered by the defendant and the plaintiff in the market, the strength of the plaintiff’s mark in terms uniqueness, and the evidence that defendant had the intention to cause confusion or to misdirect.When the similarity between two products is high, the confusion that such goods cause to the market is likely to be stronger. The strength of the trademark determines the strength of the consumers ‘relationship with the product ownership. In judging the strength of a trademark the court undertakes the continuum or the two prong tests. The continuum test involves determining the level of distinctiveness in a trademark. A mark which is highly distinctive is considered to be strong. A descriptive trademark has chances of being stronger with time as it continues to develop secondary meaning. In the prong test, the results of the continuum test are compared with the recognition that the mark receives in the market. This can be determined by checking the success of the products sold in that trademark and how well the public relates to the trademark. Evidence must also be present indicating how the use of a certain trademark influences the purchasing of the goods by the public. Consumers tend to exercise caution about the origin of some products, while for some other products, they are not as cautious about their products. Products such as perfumes and jewelry receive a lot of scrutiny from the client as they would only purchase when they trust the origin of the goods (Spinder, 2002). While buying other items such as underwear and vegetables, consumers may not be very much concerned about their place of origin. It therefore follows that marks of the products that require a lot of care while purchasing them should be protected more than the marks for the products bought without a lot of caution. The Lanham Act also provides that it is not necessary to show the evidence of confusion if there is no infringement. If the products take very long in the market without affecting the sale of the original products, it implies that little or no confusion is created to warrant for any infringement. The court has to weigh all these options to determine the likelihood of confusion and the viability of trademark infringement (Stuckey, 1996). The decisions in such cases are in most cases subjective as judges find little faith in comparing past cases prompting cases to be determined depending on their nature. There was a ruling that was done by a court that a trademark that is not causing confusion to the consumers even if it originated from another company, needed not to be prohibited unless it interferes n any way with the sale of the original company’s products. If the mark does not deceive that public, there is no need for the court to prevent its use. This applies equally to the e-commerce as it does to other forms of business and the infringement rulings should be done without any discrimination with the trademark law being followed to the latter References Dannay, R. (1987). Introduction to Copyright and trademark law. London: Cambridge. Gilson, J. (2004). Trademark protection and practices. Boston: Routledge. Greenbuam, A. (1990). Current Development in trademark law and unfair competition. New York: Routledge. International Trademark Association. (1992).Trademark law Handbook. New Delhi: Time Books. Plotkin, M., & Wells, B. (2003). E-commerce law and business. Athens: Aspen. Scassa, T., & Deturbide, M. (2004). Electronic commerce and internet law in Canada. Vancouver: CCH Canadian Limited. Spinder, G. (2002). E-commerce law in Europe and the USA. London: Springer. Stuckey, K.(1996). Internet and online law. California: Law Journal Press. Read More