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Excerpted from 6/94 paper by D. Jennings Meincke
The remedies for successful claims of federal trademark infringement and unfair competition range from injunctions 304 to triple damages with costs and fees. 305 Additionally, both trademark infringement and unfair competition have the same remedies. 306 However, courts do not make punitive damage awards as the Lanham Act is remedial only. 307 Also, courts will not award damages for Lanham Act violations when the plaintiff receives awards from other theories of recovery. 308
Section 1116(d) specifies only violations that consist of counterfeit marks can be seized. 309 The statute excludes situations when the manufacturer of the item can use the mark. 310 Further, remedies exist to recover damages caused by wrongful seizures. 311
Courts typically award injunctions in unfair competition cases. 312 However, "the law requires that courts closely tailor injunctions to the harm that they address. 313 To accomplish this, the court can enjoin and require affirmative actions. 314
West can also ask for pecuniary awards. However, while courts grant injunctive relief based on likelihood of confusion, need to show actual confusion to receive damages. 316 Additionally, if the court finds willfully infringes rights, then the court has the discretion to award profits. 317 Willful infringement occurs when the an infringer acts "wantonly and maliciously and in reckless disregard of [plaintiff's rights." 318 acts without willful intent to infringe, can only receive damages, which they need to prove. 319
Plaintiff can get attorney's fees only if it proves the defendant intentionally infringes its Lanham Act rights. 320 Defendant can only get attorney's fees if the plaintiff's suit totally lacks merit or is harassment.
As for court costs, courts routinely awards them to the prevailing plaintiff. 321
POTENTIAL OF LANHAM ACT TO PROTECT ELECTRONIC INFORMATION.
The Lanham Act potentially protects electronic property not covered by copyright laws. Copyright laws protect original works of authorship fixed in any tangible medium of expression. 322 Certainly many of the items on the national information infrastructure fall into this category. However, some items do not receive full copyright protection, such as blank forms, standard charts, routine displays of data, financial reports, facts, and simple explanations. 323 Since the Lanham Act requires no originality, people's electronic goods of this type can attain protection through the Lanham Act.
For federal protection, a recognizable indication of origin needs to be attached to the item. Federally registered marks receive protection along with non- registered marks under the Lanham Act. However, removal of the mark, either registered or not registered, results in reverse passing off unfair competition claim.
While the use of reverse passing off claims amount to few cases, the potential for protecting the rights of the source of the electronic items lies here. Marks not only function as to identify goods, signify one source controls goods to a certain quality level, and aid in advertising the goods, but they also represent the good will the merchant built up. 324
In electronic medium, marks serve those purposes as seen in Playboy, Sega v. Maphia, and Classic Font. However, only one of those cases revolves removing the mark from an electronic item. Playboy holds that replacing one trademark with another constitutes unfair competition because people would be confused as to the origin and association of the computer file. Using section 43(a) in this manner is the key to protecting electronic items.
For an unfair competition claim someone needs to use any word, term, name, symbol, device, or combination in interstate commerce which is likely to cause confusion as to source, sponsorship, or association. Assuming the interstate commerce element is met, the question becomes how to prove the likelihood of confusion element when a person removes the mark off of someone else's electronic product?
A likelihood of confusion should be found as a matter of law when someone removes a mark from an electronic item. In National Ass'n of Blue Shield Plans v. United Bankers Life Ins. Co., 325 the court holds that when intent is proved, the court will follow the alleged infringer's judgement and find a likelihood of confusion. 326 So, courts should assume that someone intends to confuse by removing the mark and in that case find as a matter of law that a likelihood of confusion exists. So, once the item goes back into interstate commerce, two of the elements of confusion is met.
The last element of unfair competition violation, the use of any word, term, name, symbol, device, or combination, can easily be met as well. If express reverse passing off occurs, the new mark on the item comprises the last element of the 43(a) claim. If implied reverse passing off takes place, the problem is not as straight forward. If the potential section 43(a) violator sends the item though the national information infrastructure, often an address or phone number of the sender is attached and that can fulfill the last element. If a situation occurs when the violator leaves no trace, then the argument would be by removing the mark, the "use" part of the element is met.
Using the above method to protect electronic items works easily when the violator only removes the marks. What if the alleged violator changes the electronic item so that it is not substantially the same item? Roho holds that people should be able to change the item and not acknowledge the raw material originator. Also, marketplace competition demands competitors have the ability to legally copy another's product so long as no restrictions apply. Should a distinction be made between someone who copies electronic information using a system command and someone who copies by viewing the electronic item and manually enters in a new computer file? This distinction probably could not be enforced. However, the law could easily place the burden of proof of manual copying on the alleged violator. Proof of manual copying could be work records and affidavits.
In conclusion, the Lanham Act could protect electronic items by 1)
placing indications of origin on the items, 2) finding as a matter of
law that mark removal demonstrates intent to confuse, meeting the
likelihood of confusion element of unfair competition, and 3) electronic
items relying on only trademark protection can be copied but the copying
must be manual and the burden of proof that the copying was manual is on
the alleged violator. A problem occurs when a person changes the item
into something new. The new item needs not carry the old mark but
defining what constitutes something "new" creates problems. It will
probably need to be found as a matter of fact in each case.
302 1993 WL 522892 at *11.
303 728 F. Supp. at 243.
304 Injunctive relief
(a) Jurisdiction; service. The several courts vested with jurisdiction of civil actions arising under this Act [15 U.S.C. Sects. 1051 et seq.] shall have power to grant injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent the violation of any right of the registrant of a mark registered in the Patent and Trademark Office or to prevent a violation under section 43(a) [ö 1125(a)].
15 U.S.C. ö1116.
305 Recovery for Violation of Rights
(a) Profits; Damages and Costs; Attorney Fees
When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, or a violation under section 43(a) [ö 1125(a)], shall have been established in any civil action arising under this Act [ö 1051 et seq.], the plaintiff shall be entitled, subject to the provisions of sections 29 and 32 [ö 1111, 1114], and subject to the principles of equity, to recover (1) defendant's profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action. The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant's sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party.
15 U.S.C. ö1117(a).
306 ö 1117(a).
307 Getty Petroleum Corp. v. Bartco Petroleum Corp., 858 F.2d 103, 113 (2d Cir. 1988).
308 Manufacturers Tech. Inc. v. Cams Inc., 728 F. Supp 75, 85 (D. Conn.1989) (no double recovery).
309 15 U.S.C. ö 1116(d) (1993).
310 McCarthy, supra note 9, ö 30.16[c].
311 Id. at ö 30.16[i].
312 National Football League v. Wichita Falls Sportswear, 532 F. Supp. 651, 664 (W.D. Wash. 1982).
313 ALPO Pet foods, Inc. v. Ralston Purina Co., 913 F.2d 958, 972 (D.C.Cir. 1990).
314 McCarthy, supra note 9, ö 30.04.
315 Id. at ö 30.04.
316 PPX Enter., Inc. v. Audiofidelity Enter., 818 F.2d 266, 271 (2d. Cir.1987).
317 The George Basch Co. v. Blue Coral Inc., 968 F.2d 1532, 1537 (2d Cir.1992)
319 McCarthy, supra note 9, ö 30.27.
320 Id. at ö 30.30[b].
321 Id. at ö 30.31.
322 17 U.S.C. ö 102.
323 L.J. Kutten, Computer Software Protection/Liability/Law/Forms, 2-19 (1994).
324 McCarthy, supra note 9, ö 3.01.
325 263 F.2d 374 (5th Cir. 1966).
326 263 F.2d at 377.
Meincke is/was a student at Villanova Law School
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