Jose Felgueroso
Abogado | Attorney
The Protection of Unregistered Marks in the United States
info@josefelgueroso.com
2021-01-27
A person or company can claim trademark rights in the United States based on its use of a mark in that country, even if it is not registered with the Patent and Trademark Office (the "USPTO"). These unregistered marks are known as "common law marks."
Common law marks create enforceable rights in connection with specific goods or services. The rights are restricted to the geographical areas where the goods are sold or the services are provided. Similarly, the scope of the rights created by common law marks is limited; in particular, in a likelihood of confusion case, the holder of a common law mark must prove that the mark is distinctive and that it began using it before the other party. In contrast, a registered mark is presumably valid, placing the burden of proof on the party alleging its invalidity.
For example, two companies A and B use similar marks for similar products in the same geographical area; A has registered its trademark, but B has a common law mark. B can prevail if it can show that it has a distinctive mark and that it used that mark in that geographic area before A.
Below is a summary of a 2018 case from the United States Court of Appeals for the District of Columbia (the "Court of Appeals") in which one of the parties claimed that the other party had infringed its common law marks.
Paleteria La Michoacana v. Productos Lácteos Tocumbo (2018)
Background
Paleteria La Michoacana, Inc. ("PLM," a company based in the United States) and Productos Lácteos Tocumbo S.A. de C.V. ("Prolacto," a company based in Mexico) sell paletas, which are frozen desserts that contain fresh fruit. PLM was founded by two Mexican-American brothers in northern California in the 1990s. The owners of Prolacto claim that their ancestor founded the first paleteria in Michoacán in the 1940s. The two companies sold their products in several markets in the United States using the name "La Michoacana" and an image of a girl in traditional dress holding a paleta (the "Indian Girl").
Procedural History
Prolacto sought and obtained the cancellation of one of PLM's marks with an Indian Girl image registered with the USPTO. PLM challenged the cancellation of its mark in district court, and each party claimed that the other was infringing its marks. In addition, Prolacto claimed that PLM had engaged in false advertising.
The district court upheld the USPTO's cancellation of PLM's mark, ruled that Prolacto had infringed PLM's Indian Girl marks, and held that PLM's use of "La Michoacana" and the Indian Girl image did not infringe the trademark rights of Prolacto, whose claims were largely based on its prior use of the disputed words and images in Mexico.
Prolacto appealed the district court's decision on trademark infringement and false advertising. The rest of this summary focuses on the trademark infringement claims.
Trademark Infringement
To prevail in its trademark infringement claim, Prolacto had to prove that: (1) its marks were distinctive in connection with the goods sold; (2) Prolacto was the first to use the mark in a particular geographic area of the United States; (3) Prolacto suffered damage as a result of PLM's actions; (4) PLM used the marks in United States commerce; and (5) PLM's marks caused confusion among consumers.
Regarding the last three elements, the Court of Appeals held that Prolacto had failed to show injury through loss of sales, or any evidence regarding crossover between its costumers and PLM's; that PLM had used its marks in United States commerce; and that Prolacto had failed to show confusion among consumers.
Regarding distinctiveness, the Court of Appeals held that "La Michoacana" is not a distinctive mark. The parties agreed that the marks were not distinctive and that they were geographically descriptive, as paletas are associated with Michoacán in a manner similar to the association between Philly and cheesesteak. In addition, the Court of Appeals found that Prolacto had failed to show that "La Michoacana" had achieved secondary meaning, which occurs when over time the public associates a term with a particular company, rather than regarding it as a description of the product.
Regarding priority of use, the Court of Appeals held that Prolacto had failed to show it was the first to use the disputed marks in the United States. Prolacto had claimed priority based on its use of the marks in Mexico, but marks have separate existence in each sovereign territory, and priority of use of a mark in another country does not lead to legal protection for that mark in the United States. Prolacto had claimed priority of use in Florida, northern California, and Houston, Texas. The Court of Appeals found that Prolacto had no business in Florida and that PLM had used the marks first in northern California. Regarding Houston, the Court of Appeals found that Prolacto had not used the Indian Girl image first, and that it could not claim priority of use for "La Michoacana," because that mark is not distinctive.
In sum, the Court of Appeals held in favor of PLM, because Prolacto had failed to provide evidence of loss of sales, crossover between its costumers and PLM's, or confusion among consumers. In addition, it held that "La Michoacana" is not a distinctive mark and Prolacto's prior use of the marks in Mexico did not create enforceable rights in the United States.
Benefits of Trademark Registration
A trademark holder can rely on common law rights to protects its mark, and the registration of a mark with the USPTO is optional. A trademark registration with the USPTO, however, provides additional rights, because a registered mark has a presumption of validity, is enforceable nationwide, gives notice of the trademark holder's use of the mark, and provides the holder the exclusive right to use the mark in connection with the goods or services indicated in the registration.