Trademark Law Explained for Small Businesses
Trademarks are the rights to use that are registered for symbols, words or phrases that are used to identify a particular seller or manufacturer’s product and help to create a distinction from other products in the market.
For example, the word Coca-Cola creates a distinction from Pepsi, which are two registered trademarks of the same type of brown coloured cola beverage. Trademark law also covers service marks that are used to describe a particular service rather than a product for example the world renowned courier services DHL or UPS.
Under certain circumstances, trademark rights are also extended beyond symbols, word and phrases and thus include other aspects of a product such as the design, colouring, shape and packaging. These features fall within the term ‘trade dress’ and are given protection by the trademark law if the consumers of the product associate them with the particular features of the manufacturer and not that of the product itself. Competition and functionality advantage can never be given aid by trademark law and is generally covered by patent rights.
If a product owner has the rights of a particular trademark, than they sue in the court of law if any other party is infringing the trademark. The accepted standard for trademark infringement is ‘likelihood of confusion.’ This means that the product accused of trademark infringement is likely to cause confusion to the consumer base as to the source of the goods or the approval of the goods.
A person may wish to purchase a particular product and due to the confusion in the name, design or packaging, instead purchases the other product. The courts, while deciding whether confusion is caused between two or more products will consider a number of factors such as the similarity of the marks, the strength of the mark, the similarity between market channels, actual evidence of confusion arising to the consumers, the proximity of the goods, and the intention of the defendant in making that product the way it is.
Apart from an action for infringement, the owners of trademarks can also sue in the court of law under the provision of trademark dilution. This can only be done in case a trademark is famous. The courts, in such cases, will look for different factors to constitute whether the trademark is famous or not. The factors would include the duration and extension of use, the geographical extent of the market of the product, the channels acquired for trade of the product, the degree of acquired or inherent distinctiveness, the amount of publicity and advertising, the products recognition in the market, the registration of the trademark and any similarities with the trademarks of other products in the market.
Passing off is another cause of action under trademark law. It occurs when someone tries to sell their product as the original trademark owner’s product. This is done by creating confusion by slight changes to the original name, design and packing of the product and targeting the same consumer markets. Reverse passing off also occurs; when someone uses the original trademarked product and sells it under their own name, most likely to gain a false reputation in the market.
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