Trademark Infringement / Trademark Litigation: What Is It and How Does It Work?
Trademarks are words or symbols that serve as names under which products are sold. Service marks are words or symbols under which services are provided. Other than this difference, the law on trademarks and service marks is very similar, and we mean to include both when we talk about trademarks below.
What is Trademark Infringement?
A trademark gives its holder the right to prevent another party from offering similar goods or services under a mark, or under a mark that is confusingly similar to the owner’s mark. If the owner of a mark finds that another party is using a mark that is similar to his or hers, an allegation of trademark infringement may be made.
Preliminaries to Trademark Infringement Litigation
A trademark holder often has an attorney send what is called a demand letter to someone that they believe may be infringing the holder’s mark. If you receive such a letter, it is wise to immediately contact a qualified trademark attorney, as important legal rights come into being as soon as a demand letter is received. These may include the ability to have a case tried in a court convenient to the accused infringer, rather than one more convenient for the trademark holder.
Typically, a demand letter will put the accused infringer on notice of the mark, as an infringer who actually knows of the trademark that he or she is infringing may be subject to enhanced damages for willful infringement. The letter will generally include a demand that the alleged infringer stop using the mark, and may propose settlement terms. The terms proposed by trademark holders are often more than what they are willing to accept, or more than they would be able to get under the law, and skillful negotiation at this point may eliminate litigation altogether.
However, if there is no agreement, and the trademark owner is unwilling to drop the matter, the case must go on to actual litigation in the courts. Trademark infringement cases can move very quickly, at least in their initial stages. It is not unusual for a mark owner to ask for a preliminary injunction or a temporary restraining order to stop use of the accused mark while the case is being decided. If you have a valid defense, and you receive notice that either a preliminary injunction or a temporary restraining order has been demanded, you must move immediately to prevent the important loss of rights that may severely diminish your chances of later success.
What are the Steps in Trademark Infringement Litigation?
Trademark litigation cases are generally governed by federal law, that is, by the United States Code, so they are almost always heard in federal court. Nonetheless, there is also state law on trademark, and cases are often brought alleging a mixture of federal and state law violations. Every state in the
In many respects, the fact that trademark infringement is a federal issue makes the law more consistent because there is not as much state-by-state variation in the law, as would be common with most business issues. In cases that involve mixed issues of federal and state law, winning on the federal claim is often key to also winning on the state claims.
Trademark Litigation Begins With a Complaint
Trademark litigation begins in earnest when the holder of the mark, who is the Plaintiff, files a Complaint in federal court. This may be done in the district court in the Defendant’s home district, or under some conditions, may be filed where the Plaintiff lives, or where the infringement allegedly took place. The decisions as to where a case will eventually be tried, which are are called issues of jurisdiction and venue, are critical, and sometimes determine the very outcome of a case. As is easy to see, it is much better to defend a case in your own back yard than across the country, and while the Plaintiff can be counted on to ask for a convenient location when the suit is filed; it is important that the Defendant examine all possible arguments that favor a more convenient location for the defense.
It is vital that the accused Defendant take action immediately when served with the Complaint. Under the federal rules, a Defendant may have as little as 20 days to make a response. If he or she does not, the court may enter a default against the Defendant that, unless later reversed, acts as a fining of guilt on the issue of infringement. The court may then impose a monetary judgment against the Defendant.
Next Comes Planning for the Defense and the Answer
After the Complaint is filed, the Defendant makes a response, which may be a Motion to Dismiss, or an Answer, or sometimes both. It is important that all possible defenses be considered as early as possible in a case, and there are many defenses. They range from powerful procedural defenses, such as lack of jurisdiction to defenses that deny the substance of the claim – including prior use, lack of threatened confusion, fair use, unenforceability of the mark, and trademark misuse, among others. It is critical that these defenses be considered immediately, because a Defendant may lose the right to invoke them as the proceedings move along. The Answer serves as the Defendant’s first opportunity to defend the case on the merits, that is, to say why the Defendant is not guilty of infringement. The Defendant also may bring counterclaims; which are claims against the Plaintiff that seek to bar the Plaintiff from enforcing their claims.
What is Discovery?
The case next enters the stage of discovery. Both Plaintiff and Defendant are allowed, generally though their attorneys, to conduct sworn interviews, called depositions, as well as to inspect records and documents that are in the hands of the other party. The period of discovery can last as much as a year or more, depending on the complexity of the case. The purpose of discovery is to allow both sides to unearth as many facts as possible before trial. Based on discovery, some issues may be resolved, or dismissed, before trial. If there are multiple Plaintiffs or Defendants, some may be dismissed, and others may be added, before trial.
What About Settlement?
Some surveys have indicated that as many as 95% or more of all civil cases in the federal courts, that is, non-criminal matters, do not go to trial. Many are dismissed by the court, or, if the facts are overwhelming on one side or another, the court may enter summary judgment, giving victory to one side. Many cases are settled by agreement of the parties, or settlement.
Wise Plaintiffs and Defendants are always open to the possibility of settlement. Trademark infringement cases can be grueling and expensive endeavors, and a settlement may be the best resolution for everyone. The closer a case comes to the time of trial, the more pressure that exists on both parties to settle, and it is not unusual for case to settle, “on the courthouse steps,” that is, just before trial.
Trial
While some preliminary matters are decided by a judge, most trademark cases have their primary issues decided by a jury. During a trial, which may last anywhere from a few days to a few weeks, there is direct examination of witnesses and experts, cross-examination of witnesses, and a number of documents placed before the jury. Attorneys for both sides will make arguments intended to cast the evidence in the best possible light for their side. In the end, the case will go to the jury for decision.
What Are Possible Defenses to Charges of Trademark Infringement?
The simplest defense to understand is non-infringement: that is, the accused name does not infringe the claimed mark, most commonly because there is a lack of confusion between the marks, and which might be analogized to a simple “not guilty” plea. However, there are a number of other defenses, many of which are extremely powerful. If a Plaintiff has not followed the correct procedural steps, a case may be dismissed very early.
Key Points
The worst thing a Defendant can do when confronted by a trademark infringement action is to do nothing. A preliminary injunction and/or a temporary restraining order can set a business back severely, perhaps even forcing it out of business. Plaintiffs often overreach what they are entitled to under the law, and are often wrong about their rights and the enforceability of what they believe to be their marks.
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