Louis Vuitton – the high-end fashion retailer – has been awarded damages in excess of $30 million dollars for willful trademark infringement and $900,000 for willful copyright infringement. The infringers were a pair of website hosting companies. After repeated requests for removal of the infringing web sites went ignored, Louis Vuitton filed action for contributory trademark infringement and copyright infringement against the service providers.
The defendant’s raised the defense of immunity under the Digital Millennium Copyright Act’s (DMCA) safe harbor provision, which exempts online service providers from claims of copyright infringement as a result of the actions of their customers. However, the DMCA only creates a safe harbor for online service providers against copyright liability if they adhere to and qualify for certain safe harbor guidelines and promptly block access to or remove allegedly infringing materials upon notice of the infringement by the copyright holder. Under the DMCA, if the service provider fails to immediately remove the infringing copyright protected materials, the service provider may be subject to a claim of direct copyright infringement.
Although the defendants did not commit direct copyright infringement of the Louis Vuitton merchandise, they hosted the web sites that did. And once placed on notice of the ongoing copyright infringements, they failed to take action as required under the DMCA. They were also found to have control of the infringing web sites. Thus, were found to have committed contributory trademark infringement. To be held accountable for the infringing acts of others, defendants must know – or they should have known – that a third party’s actions constitute an infringement and must have provided substantial assistance to the direct infringers.
What this case demonstrates is that the DMCA’s safe harbor provision does not permit service providers to ignore copyright infringements taking place on their servers once properly notified. To do so may result in large damage awards as seen in this case.
What is a Descriptive “Trademark”? The Trademark Trial and Appeal Board (the “Board”), the administrative court for the United States Trademark Office, upheld a trademark examiner’s refusal to register the applied-for trademark SCENT STRIPES for various bag products, including garbage bags, general purpose plastic bags, paper gift bags, bags for disposable diapers and sandwich bags. The trademark examining attorney refused registration of the applied-for mark on the ground it merely describes a characteristic, feature and/or function of the products.
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The examiner concluded that the term SCENT STRIPES for items such as garbage bags, gift bags and diaper bags is descriptive because those products feature a scented stripe. The examiner also pointed to Internet evidence showing that the term “scented stripe” is used in connection with fragrances.
Based upon the record, the Board held that the average consumer of applicant’s products would immediately understand that the products feature scented stripes to eliminate odors. Accordingly, the Board upheld the refusal to registration.
Descriptive Terms (“Marks”) – Analysis Overview
When selecting a brand name, it is important to remember that a term or terms that immediately convey a certain feature, characteristic, purpose, ingredient or use of the products or services are considered to be descriptive; thus not legally protectable upon first use. It is also important to remember that a term need only describe one aspect of the product or service for that term to be descriptive – thus not immediately protectable as a mark. Also, the determination of whether a mark is descriptive is not determined in the abstract, but rather in relation to the products themselves. Meaning would someone who knows what the products are immediately understand the descriptive meaning of the term as applied to the products/services?
Why Selection of Descriptive “Trademarks” is Not Recommended
Although marketers love descriptive ‘marks’ because they can “sell” products with little advertising budget, they fail to appreciate that they are not immediately protectable as trademarks. Meaning that competitors can also use that “trademark” without trademark infringement. The reason there’s no trademark infringement is because consumers generally do not perceive descriptive terms as source identifiers (or trademarks) but rather as descriptors.
U.S. Patent and Trademark Office Campus
Some descriptive terms can, however, become protectable trademarks through extensive use. Think of Best Buy, News Week and The Wall Street Journal. Those are all descriptive terms / marks, yet they have become strong brand names. Turning a descriptive term into a protectable trademark can take many years and a big advertising budget! And some descriptive marks may never reach trademark status.
Think about that for a minute. A company can use a descriptive term as its “mark” for many years to later discover that it has no trademark rights at all and even worse its competitors can freely use its mark! And even if descriptive terms do acquire trademark rights (i.e., McDonald’s and TV Guide) those rights are limited. For example, competitors can still use trademarks consisting of descriptive terms in a descriptive sense to describe their own products. #NotTheBest
Better Strategy
The better approach to selecting brand names is to select names that are at least suggestive of the products or services. For example, Grey Hound for bus transportation services, Die Hard for batteries and Close Up for toothpaste. You may also add a descriptive tagline to “drive home” the descriptive features and attributes of the products without jeopardizing brand name strength.
Factors to consider when selecting a valuable brand name include whether the name is distinctive, meaning the mark is immediately protectable as a trademark, distinguishable from competitors’ marks, able to drive the positioning strategy and able to convey the attributes consumers want. It’s also a good idea to select marks that are memorable, short and simple to understand, likeable and don’t have translation issues.
There is no perfect science to selecting the “right” brand name. However, just be sure to consider how consumers perceive your product rather than how the company perceives the product, which can be the difference between a successful brand and brand failure.
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