A trademark is a symbol, phrase, or some other device that distinguishes ownership of a product or service. For example, the way that McDonald’s writes the “M” and the Nike swoosh are both trademarks. When you see either, you know what to expect.
United States federal law governs trademarks. Trademarks are described in section 32(1) of the Lanham Act a set of federal laws. A trademark is intended to stand as a mark of quality. They can be viewed at the government’s website for the USPTO (United States Patent and Trademark Office).
People that buy products from Amazon third-party sellers' often rely on trademarks when making purchases. When they see a trademark, buyers know they are getting quality goods even though the seller is not an authorized reseller.
Trademark infringement occurs when someone takes a trademark, like the Nike swoosh, and puts it on a non-Nike shirt. If you take someone’s mark and put it on your product, that is clearly trademark infringement.
What is NOT trademark violation in the United States is also clear: if you buy and then resell a real Nike shirt with the swoosh, it’s the real deal and there is no trademark violation. If you buy brand name goods at Walmart on their discount rack and resell the goods, there is no trademark violation.
What may be trademark infringement is where one person uses a word, letter or symbol that is close to another company’s trademark. For example, if you use the same type of stripe that Addidas uses but make it four stripes instead of three, it may or may not be a trademark violation. The legal test is as follows: is your mark likely to confuse a buyer as to what they are purchasing. The test is known consists of the “likelihood of confusion.”
A likelihood of confusion occurs “when the consumers viewing the mark would probably assume that the product or service it represents is associated with the source of a different product or service….”
What happens in a court of law if you lose a case where you are sued for trademark violation? Section § 1125(a) of the Lanham Act states that merchant sellers shall be liable in a civil action to any person that is likely to be damaged by the Amazon marketplace seller or Amazon marketplace reseller's trademark infringement. This means that you could owe money if you are sued.
To bring an action under the law, actual damages need not be shown. You do not have to show that you actually lost money. To bring a case for trademark infringement, you must merely show the likelihood of damages.
In determining ‘confusion’, the courts use something called the Polaroid test. The ‘Polaroid’ test was created by a court in a case involving the instant photograph camera company: Polaroid.
The eight Polaroid factors are:
- The strength of the plaintiff's mark;
- The similarity of uses;
- The proximity of the products;
- The prior owner may expand into the domain of the other;
- Actual confusion;
- Defendant's reasons for using the plaintiff's forbidden/restricted products;
- Quality of the junior user's product, such as used sold as new; and
- Sophistication of consumers.
The person or company suing does not have to show all eight factors. The courts focus on the potential to confuse consumers. The “likelihood of confusion” discussed above.
What if I get sued or sue someone else for false advertising based upon use of a trademark?
There are three potential remedies that can be ordered in a false advertising case:
- Injunctive Relief, and/or;
- Damages, and/or;
- Payment of attorneys’ fees.
What is “Injunctive Relief”
Injunctive relief is when a court orders someone do something or to stop doing something.
Injunctive relief may be granted when the person suing demonstrates confusion because of false or deceptive advertising. Injunctive relief can also be granted if "irreparable harm” has been inflicted. That may include a decrease in sales that cannot be completely the fault of fake advertising.
It is virtually impossible to prove that sales will be damaged. The party suing only has to establish that there's a relationship between a decline in its sales and a competitor’s fake advertising.
To collect damages, the party suing has to show that some consumers were actually deceived. He may also have to show that the defendant used the false advertising for products not as described and in bad faith.
If you are sued and you lose, you could be liable for attorneys’ fees. There are ways to limit your exposure to attorneys’ fees in the event of a loss.
If you want to learn more about trademark infringement, false advertising or speak with CJ about your particular issues, call us. Or, purchase our book, the Amazon Law Library, Volume 1….available on Amazon.com
About Amazon Seller Lawyer
Amazon Sellers Lawyer is a legal team that is dedicated to defending sellers’ rights by applying legal strategies to protect their accounts and handle account suspensions, complaints and policy violations. Founder, CJ Rosenbaum started his practice in 1994 where he represented entrepreneurs who operate both online & brick & mortar businesses. CJ is also a courtroom lawyer and litigator. CJ has represented various people across the United States, has taken countless depositions and tries more cases each year than most lawyers do during their entre careers.
Amazon Sellers Lawyer has the legal background needed to tackle Intellectual Property complaints that arise on the Amazon platform. Many times, these complaints are baseless or simply misguided. This legal team has the experience needed to resolve these issues and have a seller’s account reinstated. Amazon suspends sellers’ accounts everyday, and those sellers often feel helpless. This firm takes pride in being able to help get these accounts reinstated and work with these individuals to implement new business practices that will prevent future issues.