Crash course on trademarks: The protection offered by trademark law
Contrary to popular belief, a trademark does not give its holder a monopoly on the word, phrase, shape or color as such. Trademark rights are typically granted on the basis of a registration. Part of the registration is an indication of the goods and services that the trademark should protect. Only commercial use of the trademark for those classes of goods and services can be restricted by the trademark holder. Non-commercial use cannot be prevented, except if that use harms the distinctiveness of the trademark.
A trademark is an exclusive right, which means that it gives its holder the right to exclude (stop) others from using the mark. As the main aim of trademark law is to prevent unfair competition, the exclusive right is restricted to use in commerce. There are several different situations in which somebody else might be infringing on a trademark. He could be using it to sell the same types of products or services, or to sell slightly different products, or for totally different products, or maybe for a totally different reason.
Use for the same goods or services
The clearest case of trademark infringement occurs when somebody else uses the same name or logo for his product or services as the trademark holder. Typically the products in question will then also be the same as or very similar to the products as sold by the trademark holder, although often not of the same quality. This type of infringement is mainly of importance when dealing with counterfeiters or pirates.
Counterfeiting famous trademarked products is big business. Many people would like to have a Rolex watch or designer clothing, so if you can make a copy that almost exactly resembles the original and you are able to sell it at a slightly lower price, you can make a very big profit. It is clear to see how this may harm the image and the exclusivity created by the trademark holder and seller of the original product. So harsh measures are often taken against such counterfeiters. Infringing products can be steam rollered when ceased, and counterfeiters can even go to jail.
Use for similar goods or services
The most common type of trademark infringement probably occurs when somebody else sells a product or service under a name that in some way resembles a registered trademark, and the products in question are the same or similar to the registered products. For example, somebody might be publishing a website under the same name as a trademarked name of a journal.
The main criterion here is whether the name of the product is confusingly similar to the trademark. If they are, then potential buyers might accidentally buy the wrong product, and that is exactly the kind of situation that trademark law was designed to prevent. Similarity in itself is not sufficient, the trademark holder must prove that there is a chance of confusion.
Determining whether two things are confusingly similar is very complex. The label of the product in question must be compared to the trademark as a whole. Even if certain elements do correspond (for example the same type of graphical symbols are used, and the various elements are arranged in a similar way) the total impression might still be different. And it is the total impression that is important, because consumers will rarely pay attention to details when making a selection of a product.
The starting point should be the average, informed, cautious and attentive ordinary consumer who is confronted with the allegedly infringing product. A comparison is then made of the degree of visible, auditive and comprehensive similarity between the label on the product and the trademark as registered. The appearance of the trademark on the original product is irrelevant. The exclusive rights are granted based on the trademark, and so it is the trademark itself that must be compared against the allegedly infringing product.
Two products are considered similar if the public would be of the opinion that the services or goods in question are of the same company or of economically linked companies. So, for example the public would not normally expect a company that makes photocameras to also sell potatoes. A potato distributor could therefore use the trademark Kodak for his potatoes, without the photo company being able to do anything about it. Of course, the more famous a trademark becomes, the bigger the chance that the public's opinion would change. The trademark Coca Cola for example appears on many different products, ranging from T-shirts to duvets. Given this information, the public would easily think that somebody selling pillows with the Coca Cola trademark on it had something to do with the Coca Cola company. Based on this, the trademark holder can act against such use of his trademark.
Another important question is how distinctive the mark is. The more distinctive a trademark is, the bigger the chance that confusion can occur.
Use for different goods or services
The registration of a trademark includes an indication of the goods or services which it is intended to protect. This means that, in principle, others are free to use the trademark for other goods or services. However, there are some exceptions. As explained earlier, a trademark always runs the risk that it loses its distinctive character, which could mean that the trademark at some point is annulled.
It is also an infringement if the use of the mark is such that it harms the trademark holder in an unfair way. The reputation or image that he has built could suffer from somebody elses use of the mark. For example, the Dutch holder of the trademark King (who makes peppermints) was able to successfully stop someone else from selling condoms under the same trademark.
Uses other than for goods or services
This can occur for example if the trademark is used in a movie, as the name of a company for in comparative advertising. It is not an infringement if the other use has a valid reason. For example, when writing an article about a company, it is permitted to use that company's trademarked name on the cover of the magazine to indicate to potential readers what the article is about.
However, prominently featuring the company's logo (which often also is a trademark) is less likely to be deemed a valid reason, as one could easily have use the name instead of the logo. A commercial presentation on the possibilities of protecting logos as trademarks would have a valid reason to show these logos as part of its presentation.
In other respects, the evaluation of infringement is the same as with use for different types of goods and services.
If a court finds that a particular use of a trademark is an infringement (as explained above), it can order various remedies to put an end to the infringement and to punish the infringer. At the very least, the infringer will be ordered to stop infringing on the trademark. Next, he could also be ordered to pay damages, for example by handing over the profits he made by selling the infringing products.
The infringer may also be ordered to remove the trademarks from any products still in stock, or to modify the name of the service in question. Any physical products that infringe on the trademark (especially if the products are copies of the original trademarked product) can be seized by the trademark holder or be destroyed at his request. The trademark holder may also request destruction of the production means used to make the infringing product. So, for instance the mould used to manufacture counterfeit Rolex watches could be destroyed. This is usually more effective than just destroying the counterfeit Rolexes themselves, as the mould allows the infringer to simply start over as soon as the court case has ended.