MGT 450 Intellectual Property

Lecture 3 Trademarks
Ammar Karim
EE Dept., NUST SEECS

What will we Cover in this Lecture?

Trademarks: Definition, Contents & Characteristics Distinctive vs. Descriptive Trademarks Deceptive Trademarks Trademark Family Trademark Protection & its duration Custom Territories Trade Description What is not allowed to Trademark Sale/Transfer/Licensing of Trademarks Trademark Infringement Situation in Pakistan Infringements & Remedies
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Credits and Acknowledgements

In this course, the lecture slides provided on the course and reference textbooks websites will be covered mainly, with a few modifications. I also acknowledge E-material provided to me by USPTO, US Dept. of Commerce and Japan Patent Office that I am using as reference for this course.

Trademarks
A trademark or mark is a distinctive sign or indicator of some kind which is used by an individual, business organization or other legal entity to:
Identify uniquely the source of its products and/or services to consumers. Distinguish its products or services from those of other entities.

Trademarks Contents
Words
(Apple for Computer)

Phrases
(Nokia: Connecting people)

Names
(Ford, Bata)

Fanciful Designations
(EasyJet, Fly Baboo)

Domain Names
(www.seecs.nust.edu.pk)

Symbols/Logos
(Bull on Red Bull)
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Trademarks Contents
Devices
(star for Mercedes Benz, flying lady for Rolls Royce)

Images/Holograms
(Holograms in credit cards)

Designs/Shapes
(Specific shape of Coca-Cola bottle )

Numbers
(Nokia 3310)

Sounds Colors Smell

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Trademarks Characteristics
Three main trademark: characteristics for a

Must be Distinctive. Should not be Deceptive. Capable of distinguishing goods or services.

Distinctive vs. Descriptive Trademarks

To be distinctive it must by its very nature be able to distinguish goods and services For example the word apple. While Apple is a very distinctive trademark for a computer, because it has absolutely nothing to do with computers, it would not be distinctive for actual apples. someone who grows and sells them could not register the word apple as a trademark and protect it, because his competitors have to be able to use the word to describe their own goods. So in general terms a trademark is not distinctive if it is descriptive.
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Deceptive Trademarks
Typically a deceptive trademark would be one that says that the goods for which it is used have certain qualities when they dont.
For example the trademark Real Leather for goods that are not made of genuine leather.

One of the key points is that when assessing the distinctiveness of a sign for a TM, it has to be judged together with the goods or services it is to be associated with.

Shell Trademark

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Trademark Family
Trademarks and Trade Names Trade Dress Service Marks Certification Marks Collective Marks

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Service Mark
What is Service Industry? Service of any description which is made available to users or potential user. Includes the provision for services in connection with business of any industrial or commercial nature, and without limitation.

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Collective Mark
Usually belong to a group or association of enterprises. The use of Collective Marks is reserved to the members of the group or association. A collective mark therefore distinguishes the goods or services of members of the association from those of other undertakings. The function of the collective mark is to inform the public about certain particular features of the product for which the collective mark is used.

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Certification Mark
Indicates that the goods or services in connection with which it is used are certified by the proprietor of the mark in respect of the origin, mode of manufacture of goods, quality or other characteristics. The certification mark may only be used in accordance with the defined standards.

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Duration for Protection

Protection is granted for ten years from the date of filing. However, a trademark is renewable for further ten years perpetually. May be renewed indefinitely.

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Trademark Protection
Like all intellectual property rights, trademarks are territorial rights, which basically means that their protection is obtained by national registration. There are certain regional registration systems which make for easier registration of the trademarks and also international treaties but ultimately involve registration in every single country and indeed every single territory. Unregistered trademarks are also protected in some countries long usage but it is a less reliable form of protection.
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Trademark Protection
WIPO has greatly contributed to efforts to make both national and regional systems for the registration of trademarks more "userfriendly" by harmonizing and simplifying certain procedures. The Trademark Law Treaty (TLT) was adopted in 1994, and sets out the information nationals of one member state must supply, and what procedures they must follow, to register trademarks in another member state's TM office.
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Custom Territories
There are certain territories that are not recognized as States and cannot for instance, become members of the United Nations. However, there is a certain administrative structure in those territories and the registration of trademarks may be possible. A good example would be Hong Kong, which has a trademark registration system different from that of the Peoples Republic of China.

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International Trademark Laws

Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). The Madrid system registration of marks Trademark Law Treaty Community Trade Mark system Well-known trade mark (Paris Convention) for the international

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Trade Description
Statement or other indication as to:
Number, quantity, measures, gauge or weight of any goods. Standard of quality of goods. Fitness for the purpose, strength, performance or behavior of any goods being drugs or foods. Place or country in which or the time at which any goods or services were made, produced or provided. Mode of manufacture. Material of which any goods are composed.

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What is not allowed to Trademark?

Generic or Descriptive. Immoral, Scandalous, Deceptive Marks. Disparages or falsely suggests a connection with persons (living or dead), institutions, beliefs, or national symbols. Depicts the flag or coat of arms or other insignia of the United States, or of any state or municipality, or of any foreign nation, or any simulation thereof.

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Sale/Transfer/Licensing of Trademarks
A trademark may be sold with or without the underlying goodwill which subsists in the business associated with the mark. However, this is not the case in the USA, where the courts consider it a fraud upon the public.
Trademark registration can only be sold and assigned if accompanied by sale of an underlying asset. Examples of assets whose sale would ordinarily support the assignment of a mark include the sale of the machinery used to produce the goods that bear the mark.

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Sale/Transfer/Licensing of Trademarks
Most jurisdictions provide for the use of trademarks to be licensed to third parties. The licensor (usually the trademark owner) must monitor the quality of the goods being produced by the licensee to avoid the risk of trademark being deemed abandoned by the courts. A trademark license should therefore include appropriate provisions dealing with quality control. The licensee provides warranties as to quality and the licensor has rights to inspection and monitoring.
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Trademark Infringement
Likelihood of confusion standard Court looks at factors like:
Similarity of goods Sophistication of consumers Length of time that mark has been used Wrongful intent

Lexus/Lexis
Mead Data Corp. sued Toyota in 1989. Toyota won
Court found little chance of confusion
Perspective luxury car buyer wont come home with a legal database instead. and vice versa.

McDonald vs. McCurry Case

McDonalds has been operating in Malaysia since 1982, with 137 outlets in the country. A local Indian food restaurant McCurry came into popularity. McDonalds filed the trademark infringement suit against McCurry in 2001. 1 May 2009 Malaysia McDonald's lost its exclusivity to use the prefix "Mc" in Malaysia after the Court of Appeals there allowed McCurry to use "Mc" in its business signage.
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McDonald vs. McCurry Case

In reaching its decision, the court overturned a 2006 High Court ruling, saying there was no evidence to show that McCurry was passing off McDonald's business as its own. The High Court had previously forced the Indian restaurant to change its name to "M Curry". The judged had assumed that McDonald's had a monopoly in the use of the prefix 'Mc' on a signage or in the conduct of business," Appeals Court judge Gopal Sri Ram said, overturning the High Court ruling.
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Web Domain Names

New frontier for trademark law. Early entrepreneurs registered:
www.mtv.com www.abc.com

Today we call them cybersquatters.

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www.delta.com 1996

www.delta.com October 2000

www.nissan.com 1996

www.nissan.com 2006

www.froogle.com 2004

Situation in Pakistan
The Trademarks Ordinance, 2001. Definition of Unfair Competition [section 67]
Act of competition contrary to honest business practices in industrial or commercial matters. May include:
Acts which cause confusion. False allegation as to discredit the competitor. Misleading public regarding quality of competitors goods. Disclosing trade secrets. Misleading advertisement. Fraudulently registering or applying for registration of a trademark.
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Counterfeiting

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Counterfeiting

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Multani Sohan Halva

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Counterfeiting

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Infringements & Remedies

Penalty of applying false trade description:
Imprisonment for three months to two years; or Fine which shall not be less than fifty-thousand rupees; or Both. [Section 99]

Penalty for second or subsequent convictions:

Imprisonment for six months to three years; or Fine which shall not be less than one-hundredthousand rupees; or Both. [Section 100]
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Infringements & Remedies

Penalty for falsification of entries in Register:
Imprisonment for three months to two years; or Fine which shall not be less than fifty-thousand rupees; or Both. [Section 101]

Penalty for falsely representing a trademark as registered:

Imprisonment for one month to six months; or Fine which shall not be less than twenty-thousand rupees; or Both. [Section 102]

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Infringements & Remedies

Compensation for Offences:
The High Court or a District Court may while passing an offence of fine direct that an amount not exceeding fifty percent of the fine imposed by it shall be paid as compensation to the person whose right has been infringed. [Section 105]

Penalty for improperly describing a place of business as connected with the Trade Marks Registry:
Imprisonment which may extend to two years; or Fine; or Both. [Section 107]

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Suggested Reading

E-Module duly uploaded on LMS.

Module 4: Trademarks

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