The Interest in Public Access

Assignment 4

Overview
Last assignment showed the usages of a trademark that its owner can control through the actions for trademark infringement, dilution, and unfair competition. This assignment looks at the uses of trademarks that remain within the control of the public.

Point of Law
Dawn Donut - the ability to enjoin others from using a protected mark is not triggered by registration alone. The ability to actually stop unauthorized use may accrue only when the registered owner enters, or plans to enter, the unauthorized users trading region.

Point of Law
L.L. Bean - trademark law generally recognizes a privilege for use of marks for parodic or critical purposes. Quality Inns (1) Family of Marks (2) Issues with permitting use by 3rd parties of infringing marks: Estoppel by Acquiescence Abandonment

Points of Law
Davidoff - Resale of a trademarked product that is materially different can constitute a trademark infringement.

Dawn Donut Company, Inc. v. Harts Food Stores, Inc.

Issue: Whether the plaintiff, under its federally registered trademarks, is entitled under the Lanham Act to enjoin the defendant from using the mark Dawn in connection with the retail sale of doughnuts and baked goods within a 6 county area of New York State surrounding Rochester.

Dawn Donut Company, Inc. v. Harts Food Stores, Inc.

Plaintiff licenses purchasers of its mixes to use its trademarks in connection with the retail sales of food products made from the mixes, but has not licensed or otherwise exploited the mark at the retail level in defendants market area for ~30 years.

Dawn Donut Company, Inc. v. Harts Food Stores, Inc.

Since 1922 plaintiff continuously used the trademark Dawn on bags of doughnut mix which it sells to bakers in various states.
Plaintiff has sold mixes to bakers in Rochester but none of the purchasers use plaintiffs mark in connection with retail sales.

Dawn Donut Company, Inc. v. Harts Food Stores, Inc.

Defendant owns and operates a retail grocery chain in NY. Products of defendants bakery are distributed through the stores with distribution to an area within a 45 mile radius of Rochester. The bakery corporation first used the imprint Dawn in packaging in 1951. The defendant had constructive notice of plaintiffs marks in 1947, the effective date of the Lanham Act.

Dawn Donut Company, Inc. v. Harts Food Stores, Inc.

Lanham Act:
Registration of a trademark on the principal register is constructive notice of the registrants claim of ownership. Eliminated the defense of good faith and lack of knowledge. Affords nationwide protection to registered marks.

Dawn Donut Company, Inc. v. Harts Food Stores, Inc.

Rule: A registrant may enjoin only that concurrent use which creates a likelihood of public confusion as to the origin of the products in connection with which the marks are used. ***If the use of the marks by the registrant and the unauthorized user are confined to two sufficiently distinct and geographically separate markets, with no likelihood that the registrant will expand his use into defendants market, so that no public confusion is possible, then the registrant is not entitled to enjoin the junior users use of the mark.

Dawn Donut Company, Inc. v. Harts Food Stores, Inc.

The district court found that in view of Ps inactivity for ~30 years in exploiting its trademarks in Ds trading area at the retail level either by advertising directed at retail purchasers or retail sales through authorized licensed users, there was no reasonable expectation that P would extend its retail operations into Ds trading area.

Dawn Donut Company, Inc. v. Harts Food Stores, Inc.

Holding:
Because there is no likelihood of confusion and no likelihood that plaintiff will expand its retail use of the mark into the defendants market area => plaintiff is not entitled to relief under the Lanham Act. Because of the effect of the constructive notice provision of the Lanham Act, should the plaintiff expand its retail activities into the six county area, it may enjoin defendants use of the mark.

L.L. Bean, Inc. v. Drake Publishers, Inc.

D published a parody of Ps famous catalog. D owned a monthly periodical featuring adult erotic entertainment. One issue contained a 2-page article that displayed a facsimile of Beans trademark and featured explicit pictures. The article was labeled in the contents page as humor and parody. Issue: Whether enjoining the publication of Ds parody violates the first amendment guarantees of freedom of expression.

L.L. Bean, Inc. v. Drake Publishers, Inc.

Holding: It was a parody and was ok.

Ds use is editorial or artistic, not commercial use of Ps mark. The article was labeled as humor and parody. The article only took up 2 pages of 100. Neither the article nor the trademark was featured on the front or back cover of the magazine (did not use the mark to identify or promote the goods).

Quality Inns International v. McDonalds Corp.

Quality Inns announced a new chain of economy hotels to be marketed under the name McSleep Inn. McDonalds immediately sent a letter stating it infringed on McDonalds family of marks that are characterized by the use of the prefix Mc combined with a generic word.

Quality Inns International v. McDonalds Corp.

McDonalds started focusing on a long distance travel market by taking over tollway restaurants and converting them to McDonalds restaurants. McDonalds created language it called McLanguage from which it developed a family of marks including marks outside the food area related to its business such as McStop, McKids, and McShuttle.
These marks combining Mc and a generic word are fanciful -> strongest protection.

Quality Inns International v. McDonalds Corp.

P established there are many other third-party uses of Mc:
McHappy and McDonuts for baked goods and donuts in Ohio and the midwest McMaid in midwest McDivots for golf accessories in CO McBud for florist in the midwest, etc.

Quality Inns International v. McDonalds Corp.

Permitting use by 3rd parties of infringing marks can be relevant to specific issues:
(1) If a trademark owner has expressly or impliedly given an assurance to another user that he will not assert his trademark rights, he may be barred from enforcing his mark against that user by reason of estoppel by acquiescence. - Acquiescence may be inferred from conduct. - Delay in enforcement of a mark against a D may become relevant to estoppel by acquiescence.

Quality Inns International v. McDonalds Corp.

(2) 3rd party uses permitted by the owner of a mark may also be probative of abandonment of a mark by the owner. - Abandoned: when any course of conduct of the owner, including acts of omission, causes the mark to lose its significance as an indication of origin. - Failure to take action against an infringer has been held to be an act of omission. - Once it is abandoned, it is in the public domain and free for the public to use.

Quality Inns International v. McDonalds Corp.

As long as there is no abandonment or estoppel by acquiescence, a trademark owners tolerance of 3rd party uses of his marks will not bar enforcement of his rights against an infringing user, but it may bear on the issue of the strength of his mark. A mark may be weakened to the point of narrow scope of enforcement, which ultimately becomes a question of abandonment.

Quality Inns International v. McDonalds Corp.

P argued that Mc has become a generic prefix meaning thrifty, consistent, or convenient.
Court held:
This case is not analogous to a circumstance where a product is referred to so frequently by brand name that even competitive brands are called by the one name and the brand identity is lost. Each use of Mc creates an express or implied allusion to McDonalds.

Holding: There is sufficient likelihood that consumers will be confused.

Davidoff & Cie, S.A. v. PLD International Corp.

Issue: Reselling of products. First sale doctrine: A trademark owners authorized initial sale of its product exhausts the owners right to maintain control over who thereafter resells the product. Exception: The unauthorized resale of a materially different product constitutes infringement -> may confuse consumers and erode goodwill.

Davidoff & Cie, S.A. v. PLD International Corp.

P is the manufacturer of fragrance products. P exclusively licenses a company to distribute its products to retailers in the U.S.
D works outside of the approved arrangement, acquiring Ps products that are intended for overseas sale or that are sold in duty-free sales, then distributing to discount retail stores in the U.S.

Davidoff & Cie, S.A. v. PLD International Corp.

When the D acquires the product, the batch codes on the fragrance bottles are obliterated with an etching tool. (D claims they are removed so the P doesnt know who sold them to the D because P would stop selling to them.) Congress sought to protect 2 groups:
(1) Consumers who purchase a product and expect to receive that product every time (2) Trademark owners spent time, energy and $

Davidoff & Cie, S.A. v. PLD International Corp.

District court found that etching the glass to remove the batch code degrades the appearance of the product and creates a likelihood of confusion. The consumer may think the product has been harmed or tampered with. This court held the same -> could adversely affect the Ps goodwill => trademark infringement.