Common Law Marks, Recognition in the Marketplace and Proof of Secondary Meaning

Common Law Marks, Recognition in the Marketplace and Proof of Secondary Meaning

    Whereas an owner of a registered mark succeeds in proving its trademark right by submitting a certificate, an owner of an unregistered mark has a heavier burden. It has to marshal sufficient evidence to prove that its mark is in fact a trademark. Complainant’s burden is illustrated in a number of recent cases. BioDelivery Sciences International, Inc. v. HLK Enterprises, Inc. c/o Domain Admin, FA0804001175189 (Nat. Arb. Forum May 19, 2008) (<bdsi>) is emblematic.

    Before commenting on these cases, it is useful to have some historical context. At the threshold of the UDRP it was questioned whether it was intended to include protection of unregistered marks. The conclusion that it did was the result of a step by step construction. Thus, the Panel in The British Broadcasting Corporation v. Jaime Renteria, D2000-0050 (WIPO March 23, 2000) noted that the Policy "does not distinguish between registered and unregistered trademarks and service marks in the context of abusive registration of domain names." He was followed by other Panels who similarly construed the Policy to mean that it was not necessary for a trademark to be registered by a governmental authority for such rights to exist, America Networks Inc. v. Masood, D2000-0131 (WIPO April 13, 2000). Indeed, the principle applies "even when the complainant is based in a civil law jurisdiction," Paragraph 1.7 of the WIPO Overview of Panel Views on Selected UDRP Questions. The Panel in Antonio de Felipe v. Registerfly.com, D2005-0969 (WIPO December 19, 2005) was skeptical of this view. For him, "These rights derive from national laws and do not exist divorced from such laws." However, at this point it is not altogether clear about unregistered trademark rights in civil law jurisdictions.

    The WIPO Overview of Panel Views on Selected UDRP Questions can be found at http://www.wipo.int/amc/en/domains/search/overview/index.html

    Given that owners of unregistered trademarks have rights in common law jurisdictions, a second question concerns the quality of evidence the complainant must offer to satisfy the heavier burden that its trademark is protectable under the Policy. The test of ownership under common law principles is priority of use whether or not the mark is registered to another person, but the party claiming ownership must have been the first to actually use the mark in commerce. All Packaging Mach. Supplies, Corp. v. Crystal Flex Packaging Corp., D2002-0383 (WIPO July 17, 2002) (U.S. parties, <allpackagingmachinery.com>, "although the phrase may be descriptive, it is entitled to protection as a mark based on 20 years of use. As a result of that long use, there is a presumption that the mark has acquired distinctiveness, and Respondent has presented no evidence to rebut that presumption."

    To return, then to BioDelivery Sciences International, Inc. In that case, the Complainant failed to offer sufficient proof that it had provided goods or services under the unregistered mark or that it had done business using the name in question in a sufficient manner for the letters "bdsi" had have accrued any secondary meaning. The Panel noted that the "four letters that create the asserted mark and the disputed domain name could stand for many things that do not interfere with Complainant’s business." The fact that the company was publicly traded on the NASDAQ exchange under those initials was not a relevant factor.

    A party claiming to have common law trademark rights must establish with competent evidence that its mark has achieved "secondary meaning" in the marketplace by offering among other proof, longevity of use, amount of sales, the nature and extent of advertising, consumer surveys and media recognition. In the words of the Supreme Court, and echoed in many ICANN decisions [Museum of Science v. Asia Ventures, Inc.., D2003-0691 (WIPO October 20, 2003), for example], a mark acquires secondary meaning when, "in the minds of the public, [its] primary significance of is to identify the source of the product rather than the product itself," Inwood Laboratories v. Ives Laboratories, 456 U.S. 844, 851, n.11 (1982).

    This principle is forcefully summed up in The Monticello Group, Ltd. v. Teletravel, Inc., D2002-1157 (WIPO April 16, 2003). The Panel found that the Complainant produced no details of the extent of its trade under the claimed mark. "One would have expected," he continues "to see sales figures, details of advertising and promotional expenditure, sample advertisements and promotional material to suggest that the Complainant has a reputation and goodwill associated with the name." However, the complainant produced none of this and simply made "a few very general unsupported statements as to the nature of [its] business." In Progressive Lighting, Inc. DBA Lee Lighting, Inc. v. Manja Klimenko, FA0502000424539 (April 8, 2005) the Panel found that the Complainant not only "failed to produce any evidence relating to the extent of advertising, promotion, sales, or media coverage, but it has also neglected to reveal to the Panel the day on which it began using the LEE LIGHTING mark in commerce."

    The lesson for complainants is that in preparing its complaint based on ownership of an unregistered trademark that is neither famous nor well known it must be prepared to offer concrete proof that "the public [in the respondent’s jurisdiction] identifies [complainant] as the source of the product itself." Anything less will be unpersuasive.