Question
Assignment 2: Resolving Intellectual Property Rights
Due Week 10 and worth 220 points
Note: The companies mentioned herein are merely hypothetical organizations with characteristics developed to enable students to respond to the assignment. You may create and / or make all necessary assumptions needed for the completion of this assignment if those assumptions are consistent with the facts presented. Do not make assumptions which obviate the need to conduct a legal analysis of the issues.
In this assignment, you will act as the fictional character of Betty Fuller, Head of Marketing at Simply Green Products, while you draft a memorandum to the company President. In this memorandum, you must explain how you would resolve the legal issues discussed in the scenario.
Scenario
Simply Green Products (SGP) is a $10 million company that produces biodegradable packing materials that orchards use in the Shenandoah Valley to transport their apples, peaches, and pears nationwide. Biodegradable materials are more eco-friendly because they break down into the environment. Such packing materials are marketed under the name “SafePac,” which is heavily advertised in trade journals. Simply Green Products have had the name “SafePac” imprinted on all of their packing material since 2008. Although SGP never filed for either state or federal trademark protection, following the advice of one of their summer interns, they did register the domain name “SafePac.com.” With the movement toward more eco-friendly agricultural production, the fact that such packing materials are biodegradable provides a primary marketing advantage over non-biodegradable competitors.
Despite the fact that SGP is highly eco-friendly, it is not particularly technologically advanced. SGP mostly advertises in trade journals and magazines, with most orders coming via the mail or phone orders. Shep Howard, President of SGP realizes his company needs to increase its marketing presence and recently hired Betty Fuller, a recent Strayer graduate with an MBA, to be the new Director of Marketing for the company. Ms. Fuller has been charged with bringing SGP’s marketing plan into the 21st century.
In preparing the new Marketing plan, Ms. Fuller, quickly noticed that although SGP owned Safepac.com, the name SafePac, itself had never been registered with the Trademark and Patent Office. Accordingly, one of the first things Ms. Fuller did was start the registration process. When searching the USPTO office database to see if a mark has already been filed she found the following entries shown below:
She immediately realized SGP had a problem. Ms. Fuller did some additional research and found that a company called Safe Choices, Inc. uses the SafePack name to market an emergency weather kit in the form of a backpack; and had received a federal registration for the mark from the Patent and Trademark Office in 2002. This backpack is sold both online at SafePack.com and in sporting goods stores nationwide.
Note: “A complete search is one that will uncover all similar marks, not just those that are identical. In this regard, searching for trademark availability is not the same as searching to register a domain name. A domain name search may focus on exact or “dead on” hits, with no consideration given to similar names or use with related products and services. Basically, a domain address is either available or it is not. The trademark process, on the other hand, is more complex. As part of the overall examination process, the USPTO will search its database to determine whether registration must be refused because a similar mark is already registered for related products or services (i.e., even identical marks may co-exist if used on goods or services not considered to be related in any way). Please note that the USPTO does not offer advisory opinions on the availability of a mark prior to filing of an actual application.”
http://www.uspto.gov/trademarks-application-process/search-trademark-database
Legal Issues
Ms. Fuller contacted Shep Howard to discuss SGP intellectual property problems and to devise a plan on how to proceed. In her meeting with Howard Ms. Fuller explained the legal issues to Howard as follows:
- SGP has been using the product name SafePac since 2008 but never trademarked or otherwise registered that named. A company called Safe Choice had registered the names SafePack and SafePacs back in 2002 and those names were listed live marks by the USPTO. Arguably, SafePac may be confusingly similar to Safe Choices marks to preclude registration of the marks. Moreover, use of the name may “constitutes a false designation of origin which is likely to confuse customers as to the source of the goods”. However, safe Choice and SGP are in different product lines and, therefore, arguably are not competitors, a requirement for infringement. The intellectual property issue at hand involves the Lanham Act.
- Even if the USPTO finds that SGP’s proposed mark and Safe Choices marks are not similar or that SGP and Safe Choice are not competitors, registrations may nonetheless be denied under the provisions of the Trademark Dilution Revision Act of 2006, 15 U.S.C. § 1125(c). For additional information, see Duvall, S.A. (2007). The Trademark Dilution Revision Act of 2006: balanced protection for famous brands. The Trademark Reporter, 97(6), 1252-1285.
- Since we purchased the domain name SafePac.com, Safe Choice may attempt to accuse SGP of cybersquatting and try to have that domain name transferred to their control. Any such action would proceed under the Anticybersquatting Consumer Protection Act (ACPA), 15 U.S.C. § 1125(d).
Finally, she outlined her plan on how to proceed with the marketing plan based on how she though the legal issues would be resolved. Mr. Howard then asked Ms. Fuller to put the information she had just given him in memo form.
Assignment Requirements
In the role of Betty Fuller, prepare the memorandum requested by Shep Howard. The memo should be three to four (3-4) pages in which you:
- Decide whether or not SGP can register SafePac as a trademark given the issues discussed in “legal issue: a”.
- Decide whether or not the Trademark Dilution Revision Act of 2006 would be violated if the USTPO granted SGP a trademark on SafePac.
- Decide whether or not the Anticybersquatting Consumer Protection Act would be violated by SGP’s use of safepac.com.
- Describe how your resolution would affect the marketing options available to the company.
- Use at least three (3) quality academic or legal resources in this assignment, such as a government Website, Law school Websites, Restatements of laws, and other treatises of Law. Your paper must include internal citations indicating the sources of your legal statements.
Note:Wikipedia and other Websites do not qualify as academic or legal resources. - Format your assignment according to the following formatting requirements:
- Typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
- Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page is not included in the required page length.
- Include a reference page. Citations and references must follow APA format. The reference page is not included in the required page length.
The specific course learning outcomes associated with this assignment are:
- Describe the legal environment of business, the sources of American law, and the basis of authority for government to regulate business.
- Use technology and information resources to research issues in business law.
- Write clearly and concisely about business law using proper writing mechanics.
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| Subject | Law and governance | Pages | 5 | Style | APA |
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Answer
Resolving Intellectual Property Rights
TO: Shep Howard, Company President
FROM: Betty Fuller, Head of Marketing
DATE: 4TH September, 2015
SUBJECT: Resolving SGP Intellectual Property Problems
The purpose of this memorandum is to provide a clear legal advice and roadmap that Simply Green Product (SGP) can follow and adopt in order to resolve the intellectual property rights problems that the company is potentially entangled into. This memorandum seeks to explain how SGP can successfully overcome the trademark registration complications potentially facing it because another company, Safe Choices Inc, already registered and is using a similar patent mark that SGP has been commercially using and intends to register with the United States Patent and Trademark Office (USPTO). SGP, therefore, needs to tread carefully in the registration process of its mark name, ‘SafePac’, which hitherto is not protected and its domain name, ‘SafePac.com’, which is too similar to that Safe Choices SafePack.Com
After careful consideration, I think that SGP can proceed and register the company under the ‘SafePac’ trademark without infringing the Lanham Trademark Act. As per the federal trademark law, registration of similar mark name will only constitute an infringement if both the mark names and the products or services are similar or belong to the same line (USPTO, 2013). Luckily for SGP, in as much the names may appear to be confusing and similar, the two companies are neither competitor nor do they produce similar or related products. Again, SGP can register under the mark SafePac since it is not likely to cause confusion hence dismissing the possibility of ‘likelihood of confusion’ by consumers. For Safe Choices to claim that there is an actual infringement or likelihood of confusion, the Lanham Act provides that ‘’ No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration’’ (USPTO 2013, pg 9 line 22). Similarly, SGP’s registration of the mark shall not constitute a false designation of origin since there is no way consumers can possibly confuse fruits packages that SGP is dealing in come from the same source as weather kits that Safe choices is producing, or even think that one company is affiliated to the other. False designation of origin only arises if consumers are misled, or another company’s products are misrepresented. Either way, SGP and Safe Choices products are sufficiently distinct to warrant such confusion.
While SGP may pass the ‘likelihood of confusion’ test, it will violate the Trademark Dilution Revision Act (TDRA) of 2006 should USPTO go ahead and grant it the right to use the ‘SafePac’ trademark name. This is because since the Trademark Dilution Revision Act of 2006 (TDRA) became effective, it is no longer necessary that the trademark names be identical, substantially similar or even nearly so to constitute trademark dilution offence, which can either be by blurring or by tarnishment of another company’s name or mark ( INTA, 2012). A company can only claim dilution if its trademark is ‘famous’ (TDRA, 2012) and indeed, Safe Choices company mark ‘SafePack’ is substantially famous by any standards. A mark is considered famous if it has countrywide publicity and recognition, its products are distributed nationally under the mark, has been operating for a long duration and it is marketed by a third party (LII, 2015). Safe Choices meets all these legal requirement hence its mark is substantially famous. The company can thus seek an injunction barring SGP from registering under the mark ‘SafePac’ since this will constitute dilution by blurring. As the TDRA (2006) provides, dilution by blurring, which means association which reduces the distinctiveness of a mark, can occur ‘’… regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury’’ TDRA section 43 (c) 15 U.S.C. § 1125 (2006).
With regards to the similarity in domain name, the fact that we purchased it means that SGP will be violating the Anticybersquatting Consumer Protection Act (ACPA), which forbids the registration and use of similar and already existing domain names considered famous or distinct in bad faith (ACPA, 1999). SGP will therefore be liable to Safe choices and would have violated this Act not so much so because our domain name is similar to that of Safe Choices, but because purchasing it can be misconstrued and constitute bad faith, or making profits through ill intentions. Violation occurs if the domain mark is famous and so if another company uses a similar domain name, it becomes diluted and loses its distinctiveness (ACPA, 1999). The ACPA states clearly that one of the factors that constitute bad faith is ‘’… offer to transfer a domain name to the mark holder for financial gain…’’ ACPA section 25:78, p. 25-296.11 (1999).
With the above presented legal situation, SGP can adopt a different marketing strategy that will not put the company under the risk of unnecessary litigation. In as much as there are provisions in which SGP can proceed with the registration process without fear of violating the trademark dilution and Cybersquatting Act, it would be wise if the company pursues a less troublesome path. The company can still go on with online marketing using the social media such as twitter and Facebook, before a less controversial name is created for the domain name. However, if it is really necessary for the company to use the mark ‘SafePac’ it can still do so without violating the TDRA because we can defend ourselves with the provision under the Act that a fair use of a mark that is descriptive does not constitute a violation ( LII, 2015). Again, we can still advertise use the mark ‘SafePac’ since it is a true reflection of the company’s production of environmentally safe products. Our marketing options will thus not adversely be affected since SGP can still market itself and make advertisement in the social media using the mark it has been using.
References
Anticybersquatting Consumer Protection Act (ACPA), 1999.
International trademark Association (INTA) (2012). ‘Trademark Dilution: Recent U.S. Case Law Rejects Requirement That Marks Must Be “Identical” or “Substantially Similar”Vol 67 No. 15 Retrieved From: http://www.inta.org/INTABulletin/Pages/TrademarkDilutionRecentUSCaseLawRejectsRequirementThatMarksMustBe%E2%80%9CIdentical%E2%80%9Dor%E2%80%9CSubstantiallySimilar%E2%80%9D.aspx
Legal Information Institute (LII), 2015. ‘15 U.S. Code § 1125 - False designations of origin, false descriptions, and dilution forbidden’ retrieved from: https://www.law.cornell.edu/uscode/text/15/1125
Trademark Dilution Revision Act of 2006.
- S. PATENT & TRADEMARK OFFICE (USPTO) (2013). US Trademark Law, Federal Statutes Retrieved from: http://www.uspto.gov/sites/default/files/trademarks/law/Trademark_Statutes.pdf