Protection of Unregistered Well-known Marks: China v. U.S.

Issue 26, By Jeffrey J. Zuber,[Trademark]

Well-known and famous trademarks enjoy a heightened level of protection around the world, “because their intrinsic nature serves to identify a particular source of a product.”1 Both China and the United States have provisions in place to recognize well-known marks and afford them special protection. In China, unregistered well-known marks are protected by the Anti-Unfair Competition Law; in the United States, three different sections of the Lanham Trademark Act offer protection against infringement.

I.Chinese protection of unregistered well-known marks

A “well-known” mark in China is one that is widely known by and enjoys a positive business reputation in the relevant Chinese public. Prior to 2002, only trademarks registered in China could qualify for well-known status, but in 2002, an Interpretation of the Supreme People’s Court extended well-known mark protection to marks that were not registered in China. In 2003, the State Administration for Industry and Commerce published Regulations on Recognition and Protection of Well-known Trademarks, 2 providing guidelines for determining well-known status of all marks.

Article 14 of China’s Trademark Law defines a “well-known” mark, but the Anti-Unfair Competition Law (UCL) is the primary law protecting unregistered trademarks. The UCL prohibits the unauthorized use of a name that is identical or substantially similar to a well-known brand name when that use causes consumer confusion.

II.U.S. protection of unregistered well-known marks

In the United States, three different sections of the Lanham Act, the federal trademark law, may be used to protect unregistered but well-known marks:

A. Lanham Act, Section 43(a): Likelihood of Confusion

Section 43(a) of the Lanham Act prohibits a person from using “any word, term, name, symbol, or device, or any combination thereof…which…is likely to cause confusion… as to the origin, sponsorship, or approval of his or her goods…” 11 U.S.C. section 1125(a). This section protects both registered and unregistered marks – both foreign and domestic -- from infringement.3

Courts analyze 43(a) claims under a two-prong test: 4 1) does the mark merit protection from infringement?, and 2) if so, is the defendant’s use of a similar mark likely to cause consumer confusion? This was applied in Louis Vuitton Malletier v. Dooney & Bourke Inc.5. Louis Vuitton (“LV”), a design firm whose famous accessories are emblazoned with LV’s registered trademarked logos, developed a line of bags with Japanese artist Takashi Murakami that combined LV’s logos with Murakami-inspired colors. A competitor developed a similar line of handbags and LV sued for trademark infringement and dilution, seeking a preliminary injunction against the competitor. The District Court denied the preliminary injunction because, in a side-by-side comparison, the purses were not identical and therefore, the court found no likelihood of confusion. LV appealed.

On appeal, the Circuit Court determined that LV’s unregistered design warranted protection under the Lanham Act 6 because the combination of its well-known logo and the Murakami colors was unique and inherently distinctive and therefore protectable.7 The court noted: “It is a strong mark. The mark earned praise and became famous almost instantly.”8

After determining that the mark was protectable, the court considered the multi-factor Polaroid 9 test to determine the likelihood of confusion. The Circuit Court disapproved of the district court’s precise side-by-side comparison of the products: “Courts should keep in mind that in this context the law requires only confusing similarity, not identity.”10   The Circuit Court remanded the case to the district court to again consider likelihood of confusion (and a resulting preliminary injunction) in light of overall market conditions.11

B. Lanham Act, Section 43(c): Trademark Dilution

The concept of dilution enables owners of famous marks to prevent others from using the mark in a way that detracts from the uniqueness of the famous mark. The Trademark Dilution Revision Act (TDRA), enacted on October 6, 2006, clarified and amended federal trademark law regarding the scope of protection afforded to “famous” marks under Section 43(c) of the Lanham Act.12  In order to obtain protection, a trademark owner need only prove that his mark is “famous,” whether registered or not. The statute sets forth eight factors that a court may consider in determining whether a mark is distinctive and famous, thus warranting protection against dilution.13

In Visa International Service Assoc. v. JSL Corp., 14 a District Court in Nevada granted Visa International’s injunction against JSL’s effort to register the mark “eVisa” and the domain name “evisa.com.” In determining that “eVisa” diluted Visa’s famous mark in violation of section 43(c) of the Lanham Act, the court found that all four elements for dilution were met: 1) Plaintiff’s mark is famous, as defined by the statute, 2) Defendant was making commercial use of the mark in commerce, 3) Defendant’s use began after Plaintiff’s mark became famous, and 4) Defendant’s use presented a likelihood of dilution of the distinctive value of the mark.15
 
Even though the Plaintiff had not specifically registered “eVisa,” the “VISA” mark was famous. Because it is common for famous brands to name websites named by putting an “e” in the front of their name (etoyota.com, ehonda.com) to denote the electronic version of the business, “eVisa” weakened the Visa brand. The court wrote: “This dilution … reduces the capacity of the VISA mark to identify the goods and services of its owner.”16

C. Lanham Act, Section 43(d): Cybersquatting

A third legal mechanism in the U.S. for protecting well-known, unregistered marks is the Anti-Cybersquatting Consumer Protection Act (ACPA), section 43(d) of the Lanham Act.17 The ACPA was specifically passed to protect owners of well-known marks from “cybersquatting” – when a person other than the mark holder registers the domain name of the well-known mark and then attempts to profit by either ransoming the domain name back to the trademark holder or by using the domain name to divert business from the trademark holder.18

A famous trademark owner asserting an ACPA claim must show: 1) it has a valid trademark entitled to protection; 2) its mark is distinctive or famous; 19 3) the defendant’s domain name is identical, confusingly similar to, or dilutive of, the owner’s mark; and 4) the defendant used, registered, or trafficked in the domain name (5) with a bad faith intent to profit.20
 
In Daimler Chrysler vs. The Net, Inc.,21 the plaintiff had registered the famous “DODGE” mark, had registered and used the domain name “4ADODGE.com,” and had used the phone number 1-800-4-A-DODGE in advertisements for many years. The defendant, a cybersquatter, 22 registered the domain names “foradodge.com” and “foradodge.net.” The Court determined that, though unregistered, Plaintiff’s 4ADODGE mark had been used in conjunction with Plaintiff’s famous “DODGE” mark for so long that it was entitled to trademark protection under the ACPA.23 The Court also held that defendant’s “foradodge.com” domain name was confusingly similar to plaintiff’s distinctive and famous mark, and was registered with a bad faith intent to profit. 24 The Court determined that the defendants had no right to use “foradodge.com” under the ACPA and had to transfer the domain name to the plaintiff.

III.Comparing protections of China v. the U.S.

Both China and the United States protect unregistered marks that are well-known or famous if the circumstances warrant that protection. Both countries define a “well-known” mark as one that is widely recognized throughout the country, not just in a niche industry or local region.

While both countries continue to develop law and policies relating to the protection of unregistered well-known marks, protection vehicles in the United States are more clearly defined, with a larger, more consistent body of precedent to inform decisions. U.S. law offers several alternative theories under which an owner of an unregistered famous mark can protect against infringement.

Trends indicate that China is rapidly progressing in its development of consistent guidelines, and the People’s Supreme Court has certainly recognized the need for those guidelines and is taking action to provide them.

Endnotes:

1. Official Airline Guides v. Goss, 6 F.3d 1385, 1390 (9th Cir. 1993).
2. Published on April 17, 2003, effective June 1, 2003.
3. Empresa Cubana del Tabaco v. Culbro Corp., 399 F.3d 462, 480 n. 10 (2nd Cir. 2005).
4. This test is set forth in Gruner + Jahr USA Publ’g v. Meredith Corp., 991 F.2d 1072 (2nd Cir. 1993).
5.454 F.3d 108 (2006).
6. For an unregistered mark to warrant protection under section 43(a) of the Lanham Act, it must qualify for registration under section 2 of the Act. 454 F.3d at 116. “To qualify for registration under section 2, or to establish protectibility under section 43(a), ‘a mark must be sufficiently distinctive to distinguish the registrant’s goods from those of others.’” Id. (citing Star Indus. v. Bacardi & Co., 412 F.3d 373, 381 (2nd Cir. 2005).
7.454 F.3d at 116.
8. Id.
9. Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2nd Cir. 1961). The non-exclusive test considers: 1) the strength of the mark, 2) the similarity of the two marks, 3) the proximity of the products, 4) actual confusion, 5) the likelihood of plaintiff’s bridging the gap, 6) defendant’s good faith in adopting the mark, 7) the quality of defendant’s products, and 8) the sophistication of consumers.
10.454 F.3d at 117.
11.Specifically, the Circuit Court instructed the district court to apply the similarity standard set forth in Louis Vuitton Malletier v. Burlington Coat Factory Warehouse Corp., 426 F.3d 532, 537 (2nd Cir. 2005).
12. Section 43(c) of the Lanham Act is codified at 15 U.S.C. section 1125(c).
13.The factors are: 1) the degree of inherent or acquired distinctiveness of the mark; 2) the duration and extent of the use of the mark in connection with the goods or services with which the mark is used; 3) the duration and extent of advertising and publicity of the mark; 4) the geographical extent of the trading area in which the mark is used; 5) the channels of trade for the goods or services with which the mark is used; 6) the degree of recognition of the mark in the trading areas and channels of trade used by the mark’s owner and the person against whom the injunction is sought; 7) the nature and extent of use of the same or similar marks by third parties; and 8) whether the mark is federally registered. 15 U.S.C. section 1225(c) (1).
14.533 F. Supp. 2d 1089 (D. Nev. 2007).
15. Avery Dennison Corp. v. Sumpton, 189 F.3d 868 (9th Cir. 1999).
16.533 F. Supp.  at 1093.
17. Codified at 15 U.S.C. 1125(d).
18. DaimlerChrysler v. The Net Inc., 388 F.3d 201, 204 (6th Cir. 2004).
19. A mark need to not be registered to receive protection under the ACPA. Rather, the court determines whether an unregistered mark is entitled to protection based on whether or not it would qualify for registration under the Lanham Act. Two Pesos Inc. v. Taco Cabana Inc., 505 U.S. 763, 768 (1992).
20. Ford Motor Co. vs. Catalanotte, 3423 F.3d 543, 546 (6th Cir. 2003).
21.388 F.3d 201 (6th Cir. 2004).
22. The defendant had registered numerous famous brand-based domain names, including “cnn.org,” “espnet.com,” “msnbc.org,” “nasdaq.net,” “www.whitehouse.com,” and many others.
23.388 F.3d at 205.
24. Id. at 205-207.

About the author:

Jeffrey J. Zuber is a partner of Zuber & Taillieu LLP focusing on intellectual property litigation and other types of litigation.

 

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