A trademark is a word, symbol, or phrase, used to identify a particular manufacturer or seller's products and distinguish them from the products of another. 

Under some circumstances, trademark protection can extend beyond words, symbols, and phrases to include other aspects of a product, such as its color or its packaging (i.e., trade dress). However, such features will not be protected if they confer any sort of functional or competitive advantage.

Trademarks make it easier for consumers to quickly identify the source of a given good. By making goods easier to identify, trademarks also give manufacturers an incentive to invest in the quality of their goods. 

Trademarks are governed by both state and federal law. The main federal statute is the Lanham Act, which was enacted in 1946 and most recently amended in 1996. Today, federal law provides the main, and by and large the most extensive, source of trademark protection, although state common law actions are still available.  

In order to serve as a trademark, a mark must be distinctive -- that is, it must be capable of identifying the source of a particular good. In determining whether a mark is distinctive, the courts group marks into four categories, based on the relationship between the mark and the underlying product:

1. arbitrary or fanciful
2. suggestive
3. descriptive
4. generic

Because the marks in each of these categories vary with respect to their distinctiveness, the requirements for, and degree of, legal protection afforded a particular trademark will depend upon which category it falls within.

An arbitrary or fanciful mark is a mark that bears no logical relationship to the underlying product. For example, "Apple" bears no inherent relationship to computers. Similarly, the Nike "swoosh" bears no inherent relationship to athletic shoes. 

A suggestive mark is a mark that evokes or suggests a characteristic of the underlying good. For example, the word "Coppertone" is suggestive of sun-tan lotion, but does not specifically describe the underlying product. Some exercise of imagination is needed to associate the word with the underlying product. 

A descriptive mark is a mark that directly describes a characteristic or quality of the underlying product (e.g. its color, odor, function, dimensions, or ingredients). For example, "All Bran" describes breakfast cereal. They tell us something about the product.These marks are protected only if they have acquired "secondary meaning." A descriptive mark acquires secondary meaning when the consuming public primarily associates that mark with a particular producer, rather than the underlying product. 

Finally, a generic mark is a mark that describes the general category to which the underlying product belongs. For example, the term "Computer" is a generic term for computer equipment. Generic marks are entitled to no protection under trademark law. Thus, a manufacturer selling "Computer" brand computers would have no exclusive right to use that term with respect to that product. 

Assuming that a trademark qualifies for protection, rights to a trademark can be acquired in one of two ways: (1) by being the first to use the mark in commerce; or (2) by being the first to register the mark with the U.S. Patent and Trademark Office ("PTO"). 

First to Use

The use of a mark generally means the actual sale of a product to the public with the mark attached. This priority is limited, however, to the geographic area in which I sell the product, along with any areas I would be expected to expand into or any areas where the reputation of the mark has been established.

First to Register

The other way to acquire priority is to register the mark with the Patent Trademark Office (PTO) with a bona fide intention to use the mark in commerce. Unlike use of a mark in commerce, registration of a mark with the PTO gives a party the right to use the mark nationwide, even if actual sales are limited to only a limited area. This right is limited, however, to the extent that the mark is already being used by others within a specific geographic area. If that is the case, then the prior user of the mark retains the right to use that mark within that geographic area; the party registering the mark gets the right to use it everywhere else. 

Trademark registration gives a party the right to use the mark nationwide, subject to the limitations.

Registration enables a party to bring an infringement suit in federal court. Registration also allows a party to potentially recover treble damages, attorneys fees, and other remedies.

Registered trademarks can, after five years, become "incontestable," at which point the exclusive right to use the mark is conclusively established.

Applications for registration are subject to approval by the Patent Trademark Office (PTO). The PTO may reject a registration on any number of grounds. For example, the PTO will refuse to register generic marks or descriptive marks that have not attained secondary meaning. The PTO can also reject "immoral or scandalous" marks, certain geographic marks, marks that are primarily surnames, and marks that are likely to cause confusion with existing marks. 

Some states also have their own registration systems under state trademark law.

The rights to a trademark can be lost through abandonment, improper licensing or assignment, or genericity.

Abandonment

A trademark is abandoned when its use is discontinued with an intent not to resume its use. Non-use for three consecutive years is prima facie evidence of abandonment. 

Improper Licensing

Trademark rights can also be lost through improper licensing or assignment. Where the use of a trademark is licensed (for example, to a franchisee) without adequate quality control or supervision by the trademark owner, that trademark will be canceled. 

Genericness

Trademark rights can also be lost through genericity. Sometimes, trademarks that are originally distinctive can become generic over time, thereby losing its trademark protection. A word will be considered generic when, in the minds of a substantial majority of the public, the word denotes a broad genus or type of product and not a specific source or manufacturer. 

If a party owns the rights to a particular trademark, that party can sue subsequent parties for trademark infringement.

The standard is "likelihood of confusion." To be more specific, the use of a trademark in connection with the sale of a good constitutes infringement if it is likely to cause consumer confusion as to the source of those goods or as to the sponsorship or approval of such goods.

In deciding whether consumers are likely to be confused, in addition to surveys, the courts will typically look to a number of factors, including: (1) the strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the similarity of marketing channels used; (6) the degree of caution exercised by the typical purchaser; (7) the defendant's intent.

In addition to bringing an action for infringement, owners of trademarks can also bring an action for trademark dilution under either federal or state law.

Federal Law

Under federal law, a dilution claim can be brought only if the mark is "famous." In deciding whether a mark is famous, the courts will look to the following factors: (1) the degree of inherent or acquired distinctiveness; (2) the duration and extent of use; (3) the amount of advertising and publicity; (4) the geographic extent of the market; (5) the channels of trade; (6) the degree of recognition in trading areas; (7) any use of similar marks by third parties; (8) whether the mark is registered.

State Law

Under state law, a mark need not be famous in order to give rise to a dilution claim. Instead, dilution is available if: (1) the mark has "selling power" or, in other words, a distinctive quality; and (2) the two marks are substantially similar.

Overview

Once the prerequisites for a dilution claim are satisfied, the owner of a mark can bring an action against any use of that mark that dilutes the distinctive quality of that mark, either through "blurring" or "tarnishment" of that mark; unlike an infringement claim, likelihood of confusion is not necessary.

Blurring occurs when the power of the mark is weakened through its identification with dissimilar goods.

Tarnishment occurs when the mark is cast in an unflattering light, typically through its association with inferior or unseemly products or services.

Although likelihood of confusion and dilution are the two main trademark-related causes of action, there exist a number of additional state-law causes of action under state unfair competition law: passing off, contributory passing off, reverse passing off, and misappropriation.

Passing off occurs when the defendant tries to pass off its product as the plaintiff's product.

Contributory passing off occurs when the defendant assists or induces another (typically a retailer) to pass of its product as the plaintiff's product. S

Reverse passing off occurs when the defendant tries to pass off the plaintiff's product as its own. So, for example, taking a computer made by

Misappropriation is a highly unstable, but potentially fruitful source of additional trademark-related claims.

Defendants in a trademark infringement or dilution claim can assert basically two types of affirmative defense: fair use or parody.

Fair use occurs when a descriptive mark is used in good faith for its primary, rather than secondary, meaning, and no consumer confusion is likely to result. 

Nominative use occurs when use of a term is necessary for purposes of identifying another producer's product, not the user's own product. The basic idea is that use of a trademark is sometimes necessary to identify and talk about another party's products and services. When the above conditions are met, such a use will be privileged.

Certain parodies of trademarks may be permissible if they are not too directly tied to commercial use. The basic idea here is that artistic and editorial parodies of trademarks serve a valuable critical function, and that this critical function is entitled to some degree of First Amendment protection. 

Successful plaintiffs are entitled to a wide range of remedies under federal law. Such plaintiffs are routinely awarded injunctions against further infringing or diluting use of the trademark.

In trademark infringement suits, monetary relief may also be available, including: (1) defendant's profits, (2) damages sustained by the plaintiff, and (3) the costs of the action.

Damages may be trebled upon showing of bad faith. In trademark dilution suits, however, damages are available only if the defendant willfully traded on the plaintiff's goodwill in using the mark. Otherwise, plaintiffs in a dilution action are limited to injunctive relief.