By E. Lee Reichert

During the past year, a number of high-profile trademark infringement and dilution cases have generated significant media attention. Whether it’s been Victoria’s Secret suing Victor’s Little Secret (which case ultimately went to the United States Supreme Court), Fox News trying to prohibit Al Franken from using the slogan "Fair and Balanced" on his book cover, or Club Med futilely attempting earlier this month to prevent the release of the low-brow movie "Club Dread," these cases have received widespread coverage from the mainstream media, as well as ongoing ridicule from late night comedians.

In fact, many trademark cases that are brought have little merit. For example, the judge in the Al Franken case found the case to be an easy case to dismiss because it was "wholly without merit both factually and legally." In light of the growing frequency of trademark infringement and dilution cases, however, businesses and their attorneys must take this issue seriously.

Trademarks and servicemarks increasingly comprise a significant portion of a company’s intellectual property assets. By way of background, trademarks are words, symbols, designs, slogans, sounds, colors or any combination thereof that serve to identify and distinguish the source of the goods identified with the mark. Servicemarks are similar to trademarks, except that they serve to identify and distinguish the source of services rather than goods. Trademarks and servicemarks can exist forever, provided that the marks continue to be used in commerce and are not otherwise abandoned.

Both the federal government, through the United Stated Patent and Trademark Office (the "USPTO"), and states have the power to grant trademarks and servicemarks. Federal law requires marks to be used in interstate commerce, while state registrations can be used to protect a regional mark from competitive use. The ® symbol means the USPTO has reviewed and registered the mark. A "TM" or "SM" symbol, on the other hand, indicates that the word, phrase or design is being used and claimed as a trademark or servicemark, but is not yet federally registered. Many states, including Colorado, do not have any review process associated with the registration of marks.

There is a difference between trademarks and trade names. A trade name is a corporate name (which can also be a fictitious name under which the company does business) used to identify a business. Trade names serve to identify and differentiate the business entity rather than to associate a good or service with the entity. Federal and state statutes may allow a business to also register their trade name as a trademark, depending on how the business is operated. In certain cases, a single mark performs both functions. For example, Coca Cola Company sells Coca Cola® trademark soft drink products.

A holder of a trademark or a servicemark can sue for infringing uses of their mark. In order to establish a claim for infringement under the federal Lanham Act, a plaintiff must show that it has a valid mark and that the defendant’s use of a similar mark is likely to cause confusion in the minds of consumers. Many states employ this "likelihood of confusion" standard for state law infringement claims. Over many cases and many years, courts have developed a list of eight to 13 elements that are relevant to the likelihood of confusion determination. An infringer can be subject to claims for damages, injunctive relief and, in certain cases, attorneys’ fees.

Alternatively -- or in addition to an infringement action -- a holder of a famous trademark can sue for dilution under the Federal Trademark Dilution Act ("FTDA"), which was enacted by Congress in 1995. Unlike traditional infringement law, which is motivated by an interest in protecting consumers, the purpose of the FTDA is to protect famous marks from subsequent uses that blur the distinctiveness of the mark. Even if there is no likelihood of confusion (i.e., no trademark infringement), a party still may be liable for blurring or tarnishing their mark under the FTDA.

When parody or satire is involved, courts traditionally have set a higher bar for plaintiffs bringing trademark infringement or dilution claims because of First Amendment concerns. This is why the judge found it so easy to dismiss Fox’s claims against Al Franken. Similarly, the judge in the Club Dread litigation accepted Fox’s arguments that moviegoers were not going to confuse its tropical slasher comedy with the high-end resort company.

On the other hand, trademark and servicemark infringement and dilution cases involving competing businesses often are more difficult and can lead to protracted and costly litigation. Holders of trademarks and servicemarks frequently find themselves in a difficult legal position, because if they do not take adequate steps to protect their marks (or if they tolerate infringing uses of their mark), they run the risk of losing their legal rights. For this and the other reasons discussed above, companies often are willing to expend hundreds of thousands of dollars on legal fees to protect their marks from any potentially infringing action.

In this regard, perhaps it is not surprising that the case brought by Victoria’s Secret against the owners of Victor’s Little Secret (a store selling adult videos, novelties and lingerie), recently went all the way to the United States Supreme Court. Ultimately, the Court unanimously decided that a plaintiff in a trademark dilution lawsuits brought under the FTDA must prove that their famous trademark actually has been diluted, not just that there is a likelihood of harm. In doing so, in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), the Court reversed the lower court decision and ruled against Victoria’s Secret. This decision marked the Supreme Court’s first analysis of the FTDA and resolved a circuit split on the appropriate legal standard to apply.

Because trademark infringement and dilution litigation can be some of the most expensive litigation there is, companies are well advised to consult with attorneys experienced in this area, both in the initial stages of incorporating the business and also as new products or services are developed and trademark or servicemark protection is desired. Similarly, companies who believe that a third party may be infringing on their marks or trade names should contact their counsel immediately to ensure that their legal rights are protected, regardless of whether such marks have been formally registered. Of course, the foregoing is a cursory review of recent trademark developments and is intended to provide only a general guide to this complicated subject matter.

The content of this article is intended to provide a general guide to the subject matter and is for informational purposes only.