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Mark It With An ®

Mark It With An ®

by James Juo
(originally published in the Summer 2012 issue of New Matter)

Trademark marking refers to the use of commonly accepted or statutorily prescribed designations to identify a source indicator for a product or service.  In addition to informing the public that a mark is intended to be a source identifier, an important benefit of statutory marking for a federally registered trademark is the availability of damages for trademark infringement before the accused infringer has any actual notice of the registration.

This article will address the forms of statutory notice for a registered mark under the Lanham Act, as well as the circumstances that may give rise to actual notice of a registered mark in the absence of statutory notice.  Next, the language in the Lanham Act regarding statutory notice will be discussed, and how a failure to provide statutory notice could limit the recovery of damages for trademark violations.  Statutory notice is encouraged in order to obtain the full benefit of a federal trademark registration.

® Is For Statutory Notice

The letter R enclosed in a circle (or “®”) may be displayed with a trademark to notify the public that the mark is registered with the United States Patent and Trademark Office (“USPTO”).[1]  Other forms of statutory notice include using the words “Registered in U.S. Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.”[2]  In addition to these examples of statutory notice for a federally registered mark, the “TM” symbol is often used to give notice of possible common law trademark rights, but this is not a form of statutory notice under the Lanham Act.

In addition to informing the public that the mark is intended to be a source identifier, statutory notice of a federal registration is required to recover damages and other monetary relief in a lawsuit for trademark infringement under the Lanham Act where there was no actual notice of the registration.[3]  Specifically, Section 29 of the Lanham Act states:

[A] registrant of a mark registered in the Patent Office, may give notice that his mark is registered” by displaying the “®” symbol (or other suitable marking) with the mark, and that “in any suit for infringement under this Act by such a registrant failing to give such notice of registration, no profits and no damages shall be recovered under the provisions of this Act unless the defendant had actual notice of the registration.[4]

If the trademark registrant fails to give statutory notice, then damages under the Lanham Act are limited to an accounting as of the day the accused infringer had actual notice that the mark was federally registered.  As a result, “damages might start running later than if [statutory] notice had been given,”[5] or be unavailable if no infringement occurred during this later period.  If there are no infringing sales after actual notice, then the registrant would not recover any damages under the Lanham Act.[6]  This encourages a registrant to give statutory notice of its trademark registration.

These statutory notice options are only available to marks registered with the USPTO.[7]  Simply filing a federal trademark application does not allow for use of these statutory markings, nor does filing for or obtaining a state trademark registration.  Furthermore, use of the ® is limited to use of the mark in association with the goods and/or services set forth in that registration.[8]  Thus, if “XYZ” were registered as a mark for shoes, then the “®” registration symbol should not be displayed with the “XYZ” mark when used with unregistered goods or services such as automobile parts or telecommunication services.  Intentional misuse of the “®” with an unregistered mark can give rise to claims of false advertising, or raise an equitable defense of unclean hands against infringement.[9]  In connection with such unregistered marks, the “TM” or “SM” symbol may be displayed to inform the public that the mark is intended to be a source identifier.[10]

Failure to display the “®” registration notice with a registered mark may prevent a plaintiff from recovering damages in a suit for infringement under the Lanham Act if the defendant did not have actual notice of the registration.[11]  Whether an accused infringer had actual notice is a question of fact.[12]  The actual notice requirement of Section 29 may be met when  the accused infringer receives a “cease-and-desist” letter, a pleading of infringement is served in a lawsuit, or other circumstantial facts indicating that the accused infringer had actual knowledge that the mark is federally registered.[13] 

Circumstantial Notice?

In Derrick Manufacturing Corp. v. Southwestern Wire Cloth, Inc., the defendant filed a motion for partial summary judgment claiming that damages for infringement of the plaintiff’s federally registered word mark “Derrick” were not recoverable because the plaintiff consistently used its mark without any notice of registration prior to the filing of the lawsuit.[14]  The district court noted that the defendant was “sophisticated in trademark matters, as evidenced by its display of its own trademarks,” was aware of the plaintiff’s “established name,” and “had an attorney advising the company in order to avoid trademark infringement.”[15]  In viewing all of this circumstantial evidence, the district court found there was a genuine issue of material fact for trial as to whether there was actual notice of the trademark registration.[16]

Similarly, in International Stamp Art, Inc. v. U.S. Postal Service, the district court considered a motion for summary judgment on the basis that the plaintiff had not displayed the registration symbol with its registered perforation design mark and defendant had no actual notice when the alleged infringement occurred.[17]  There was evidence that the plaintiff had given oral notification to Postal Service employees that its perforation design was a federally registered trademark, and that plaintiff had delivered a card to the Postal Service’s Licensing Administrator stating that the design was the plaintiff’s trademark.[18]  The district court noted that “[t]he Postal Service is a highly sophisticated defendant with extensive experience navigating and litigating trademark issues.”[19]  The district court denied the motion for summary judgment as to the recovery of damages under the Lanham Act because these circumstances presented a genuine issue of material fact as to whether actual knowledge of the registration could be inferred.

More recently, the Central District of California addressed the issue of actual notice in context of a summary judgment motion in Coach, Inc. v. Asia Pacific Trading Co.[20]  The trademark registration was for a decorative design consisting of a pattern of the letters “CC” (the “CC Design”), but no form of statutory notice had been displayed with this registered mark.[21]  There was no evidence that the defendant had any specific knowledge of the plaintiff’s “CC Design” registration prior to the filing of the lawsuit, but the defendant’s sales manager  acknowledged in a deposition that she was “familiar with [plaintiff’s] products and what they look like.”[22] The plaintiff argued that this raised a genuine issue of fact as to whether the defendant had actual notice of the plaintiff’s trademark registration prior to service of the complaint.[23]  The district court stated that “while this evidence might support a conclusion that [defendant] had some familiarity with the appearance of [plaintiff’s] products prior to service of the complaint, it does not remotely indicate . . . prior notice of [plaintiff’s] registrations, which is what § 1111 [Lanham Act § 29] requires.”[24]  The court concluded that the plaintiff failed to raise a genuine issue of material fact regarding actual notice of the registration covering the plaintiff’s design mark and held that damages under the Lanham Act were not available.[25] 

These cases illustrate that “actual notice of the registration” under Lanham Act § 29 can be inferred by circumstances.  These circumstantial facts, however, require more than mere passing knowledge that certain words or designs were used in connection with a product.

The failure to provide statutory notice and the lack of actual notice under Section 29 is generally not considered to be an affirmative defense to trademark infringement.[26]  Lack of notice acts as a limitation on damages by restricting the accounting period for determining damages to that period of time after actual notice of the registration.  Commentators have noted that monetary liability in trademark cases may give some judges considerable pause if the defendant could be characterized as an innocent infringer who was unaware of the trademark.[27]  In any event, injunctive relief, which is the traditional remedy for trademark infringement, is still available to the registrant without regard to statutory or actual notice.[28]

Give Notice, Collect Damages

Section 35 of the Lanham Act governs the damages recoverable for trademark infringement, unfair competition, and dilution under federal law.[29]  The owner of an unregistered mark has a remedy to recover the defendant’s profits and any damages for violation of its unregistered rights just as a registrant can recover damages and profits for violation of its registered rights.

Subsection (a) of Section 35 is subject to the Section 29 notice requirements for the recovery of damages.[30]

When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under [Section 43(a) or (d)], or a willful violation under [Section 43(c)], shall have been established in any civil action arising under this Act, the plaintiff shall be entitled, subject to the provisions of [Sections 29 and 32] of this Act, and subject to the provisions of equity, to recover [damages or profits].[31]

The language of Section 35(a) not only subjects remedies for the violation of a federally registered mark to the Section 29 notice requirements, but also expressly subjects claims of unfair competition under Section 43(a) and willful instances of dilution under Section 43(c) to the notice provisions of Section 29.  While infringement of a registered mark also may violate Sections 43(a) and 43(c) for unfair competition and dilution, respectively, these statutory provisions are not limited to registered marks.[32]  Sections 43(a) and 43(c) can apply to unregistered marks as well, and if there is no registration, then statutory notice does not apply.

A more novel issue is whether the lack of statutory notice under Section 29 limits equally the recoverable damages in a lawsuit alleging infringement of registered as well as unregistered rights in the same mark for the same goods or services.  For example, if there is a registration for the “XYZ” mark for shoes, but the “®” symbol was never displayed with that mark in connection with those registered goods, should Section 29 also limit the accounting period for damages in connection with the registrant’s unregistered rights under Section 43(a) for the same mark (namely, “XYZ” for shoes)?  If Section 29 limits damages under Section 43(a) for the registered mark, then, by not registering the “XYZ” mark for shoes, the accounting period for damages would not depend on either statutory notice or actual notice of a registration for the trademark (since none would exist), but would still be subject to the principles of equity.  But if Section 29 does not limit damages under Section 43(a) for the registered mark, then allowing the registrant to shift from its registered mark to its unregistered rights could expand the accounting period for recovering damages under the Lanham Act and undermine the Section 29 incentive for a registrant to give statutory notice of its trademark registration.

The language of the Lanham Act suggests that a failure to give statutory notice under Section 29 would limit damages under Section 43(a) for a mark that is registered.  For example, the recovery of damages under Section 35(a) is “subject to” Section 29.  Furthermore, Section 29 applies to “any suit for infringement” of a registered mark.  Thus, the recovery of damages under the Lanham Act requires statutory notice under Section 29 whenever a registered mark is at issue.

Indeed, Professor McCarthy contends that a “strict reading of the statutory language of § 29” leads to the conclusion that relying on Section 43(a) does not avoid the Section 29 limitation on damages because Section 29 does not distinguish between the kind of infringement that a registrant proves.[33]  “Rather, Section 29 simply states that no profits and damages shall be recovered ‘under the provisions of this Act’ unless statutory or actual notice was given.”[34]

Returning to the case of Coach, Inc. v. Asia Pacific Trading Co., the Central District of California addressed the issue of whether statutory notice applied to unfair competition and dilution claims based on a registered mark.[35]  As previously discussed in connection with the issue of actual notice, the plaintiff had sought damages for the alleged infringement of the registration for its “CC Design” mark, but there was no evidence that the plaintiff ever used any form of statutory notice (such as the “®” symbol) with its registered mark.[36]  Neither was there any evidence that there were any sales of the allegedly infringing products after actual notice of the registration was given by the filing of plaintiff’s lawsuit.[37]

The plaintiff also alleged a violation of its unregistered rights under Section 43(a), in addition to its registered rights, for the same mark, and argued that Section 29’s limitation on damages did not apply to the alleged Section 43(a) violation.[38]  But the court held that Section 29 was equally applicable to the claim under Section 43(a), and so held that the plaintiff was not entitled to recover damages under the Lanham Act for any alleged infringement prior to the filing of its lawsuit, including under Section 43(a), because the plaintiff had not followed the statutory notice requirements of Section 29.[39]

The Coach court followed the approach suggested by Professor McCarthy that a registrant cannot avoid the notice limitation imposed by Section 29 by claiming that all of its damages are based on its unregistered rights under Section 43(a) rather than on the infringement of its registered mark.[40]  The court held “that where a plaintiff, . . . sues under both 15 U.S.C. § 1114 (for infringement of a registered mark) and § 1125(a) (for infringement of a mark that need not be registered), the plain language of § 1117(a) and § 1111 indicates that a plaintiff must meet § 1111’s ‘actual notice requirement’ to recover profits or damages under § 1125(a).”[41]

Notice with Benefits

To obtain the full benefit of a federal trademark registration including the accounting of damages, the registrant should give statutory notice of its rights by displaying the “®” or another form of statutory notice with the registered mark.  Limiting damages as well for unfair competition of a registered mark under Section 43(a), is consistent with the public policy embodied in Section 29 of encouraging statutory notice of registered trademark rights.  If the statutory notice limitation on damages could be avoided merely by pleading a Section 43(a) violation based on the same registered mark, then a registrant could recover the same damages under Section 35(a) for a registered mark regardless of statutory notice and effectively vitiate Section 29.

Although the owner of an unregistered mark is not necessarily limited to an accounting of damages for infringement occurring after actual notice of the mark, unlike the registrant who fails to give statutory notice under Section 29 — an unregistered mark would not have the other benefits of a federal registration, such as the constructive use of the registered mark which confers a right of priority nationwide in connection with the goods and services listed in the registration;[42] the legal presumption of ownership of the registered mark;[43] and the ability to record the registration with the U.S. Customs and Border Protection Service to prevent importation of infringing foreign goods.[44]  Moreover, the owner of an unregistered mark also would have to establish its common law rights based on the geographic territory where the mark was actually used.  And there may be other practical issues for enforcement as well.  For example, damages under Section 35(a) are “subject to the provisions of equity,” and an accused infringer who was unaware of the unregistered mark could argue that an award of damages would not be equitable.[45]

Limiting damages for failing to give statutory notice with a registered mark in connection with Section 43(a) as well as Section 32 serves the public policy of encouraging registrants to so notify the public of trademark registrations, notwithstanding the nominal advantage in potentially expanding the accounting period for damages that this may confer to a trademark owner who does not register its marks.  Of course, that nominal advantage disappears if the owner of a registration displays the “®” symbol with the registered mark.



[1] Lanham Act § 29, 15 U.S.C. § 1111.

[2] Id.

[3] This is analogous to the patent marking statute, 35 U.S.C. § 287.

[4] 15 U.S.C. § 1111 (emphasis added); see also George Basch Co., Inc. v. Blue Coral, Inc., 968 F.2d 1532, 1539 (2d Cir. 1992) (“Historically, an award of defendant’s profits has also served as a rough proxy measure of plaintiff’s damages.”).  For purposes of discussing monetary remedies, no distinction will be made between profits and damages.

[5] Bambu Sales, Inc. v. Sultana Crackers, Inc., 683 F. Supp. 899, 911 (E.D.N.Y. 1988).

[6] Howard Stores Corp. v. Howard Clothing, Inc., 311 F. Supp. 704, 705 (N.D. Ga. 1970).

[7] 15 U.S.C. § 1111.  “Thus, use of the ® symbol conveys to the customer and to other competitors that the trademark is in fact registered with the USPTO.”  S. Snow Mfg. Co. v. Snow Wizard Holdings, Inc., No. 06-9170, 2011 WL 6287955, at *11 (E.D. La. Apr. 18, 2011); see also The Du-Dad Lure Co. v. Creme Lure Co., 143 U.S.P.Q. (BNA) 358, 359 (T.T.A.B. 1964).

[8] Lanham Act § 33(a), 15 U.S.C. § 1115(a) (a registration gives the registrant the “exclusive right to use the registered mark in commerce or in connection with the goods or services in the registration”).

[9] See Fox-Stanley Photo Products, Inc. v. Otaguro, 339 F. Supp. 1293, 1295 (D. Mass. 1972) (illegal use of the “®” symbol constituted unclean hands that disqualified the plaintiff from obtaining injunctive relief for trademark infringement); Copelands’ Enters., Inc. v. CNV, Inc., 945 F.2d 1563, 1566 (Fed. Cir. 1991) (“The improper use of a registration notice in connection with an unregistered mark, if done with intent to deceive the purchasing public or others in the trade into believing that the mark is registered, is a ground for denying the registration of an otherwise valid mark.”).

[10] See Toro Mfg. Corp. v. Kearney-National Inc., 168 U.S.P.Q. (BNA) 383, 384 n.7 (T.T.A.B. 1970).

[11] 15 U.S.C. § 1111; compare with 35 U.S.C. § 287 (“Limitation on damages and other remedies; marking and notice”) and 17 U.S.C. § 405(b) (“Effect of omission on innocent infringers”).  There is a public policy in favor of giving statutory notice of federal intellectual property rights.

[12] See Admiral Corp. v. Sewing Machine Sales Corp., 156 F. Supp. 796, 798 (S.D.N.Y. 1957).

[13] 3 J. Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 19:144 (4th ed. 2009); see also United Servs. Auto. Ass’n v. National Car Rental Sys., Inc., No. 00-1370, 2001 WL 1910543, at *4 (W.D. Tex. Sep. 26, 2001) (finding that actual notice may be established based on letters to the defendant in which the ® symbol appeared with the registered mark); Binder v. Disability Group Inc., 97 U.S.P.Q.2d (BNA) 1629, 1639 (C.D. Cal. 2011) (finding actual notice based on marketing reports to the defendant “in which Plaintiffs’ logo specifically appeared with the ®”).

[14] Derrick Mfg. Corp. v. Southwestern Wire Cloth, Inc., 934 F. Supp. 796, 811 (S.D. Tex. 1996).

[15] Id. at 812.  In the context of pleading a claim of false marking under patent law, however, the Federal Circuit has held that it was not reasonable to infer knowledge merely because the defendant was a “sophisticated company.”  In re BP Lubricants USA Inc., 637 F.3d 1307, 1309 (Fed. Cir. 2011).

[16] Derrick, 934 F. Supp. at 812-13.

[17] Int’l Stamp Art, Inc. v. U.S. Postal Service, 78 U.S.P.Q.2d (BNA) 1116, 1123 (N.D. Ga. 2005).  The plaintiff used a perforation design to serve as a border for note cards and greeting cards, and had received U.S. Trademark Registration No. 1,985,086 for its perforated border.  Id. at 1117.

[18] Id. at 1123.

[19] Id.

[20] Coach, Inc. v. Asia Pac. Trading Co., 676 F. Supp. 2d 914, 921 (C.D. Cal. 2009).

[21] Id. at 923 n.4 (citing U.S. Trademark Registration No. 2,832,589).

[22] Id. at 924.

[23] Id.

[24] Id.; cf. Kransco Mfg. Inc. v. Hayes Specialties Corp., 77 F.3d 505, 37 U.S.P.Q.2d (BNA) 1722, 1725 (Fed. Cir. 1996) (unpublished) (“The record is devoid of evidence that Hayes had any such notice of the `095 registration . . . before it received the cease and desist letter.”).

[25] Coach, supra note 20, at 924.

[26] See United States v. Sung, 51 F.3d 92, 94 (7th Cir. 1995) (15 U.S.C. § 1111 is merely a limitation on the remedies that a trademark owner can pursue); see also  United Servs. Auto. Ass’n, supra note 13, at *4; Holley Performance Products, Inc. v. Quick Fuel Tech., Inc., No. 07-00185, 2011 WL 3159177, at *5 (W.D. Ky. Jul. 26, 2011).

[27] E.g., McCarthy, supra note 13, § 30:58; see also Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 131 (1947); Quick Techs., Inc. v. Sage Group PLC, 313 F.3d 338, 349 (5th Cir. 2002) (an award of damages for trademark infringement is “not automatic”).

[28] Howard Stores Corp. v. Howard Clothing, Inc., 311 F. Supp. 704, 705 (N.D. Ga. 1970) (citing 15 U.S.C. § 1111); see also Bambu Sales, Inc. v. Sultana Crackers, Inc., 683 F. Supp. 899, 911-12 (E.D.N.Y. 1988).

[29] Lanham Act § 35, 15 U.S.C. § 1117; see also Lanham Act § 32, 15 U.S.C. § 1114 (regarding “infringement” of a registered mark).

[30] This statutory language was added to Section 35(a) in 1989.  Previously, the language of Section 35 was limited to violations of a registered trademark, but “the courts with increased frequency [were] disregarding this limitation.”  S. Rep. No. 100-515, at 39 (1988), as reprinted in 1988 U.S.C.C.A.N. 5577, 5601-2.

[31] 15 U.S.C. § 1117(a) (in addition to defendant’s profits and plaintiff’s damages, this subsection also identifies costs and attorneys’ fees as being recoverable).  As previously noted, no distinction will be made between profits and damages for purposes of discussing monetary remedies.

[32] See Mosely v. Victoria’s Secret Catalogue, Inc., 537 U.S. 418, 428 (2003) (“Traditional trademark infringement law is a part of the broader law of unfair competition.” (citation omitted)); see also Dial-A-Mattress v. Mattress Madness, 841 F. Supp. 1339, 1347 (E.D.N.Y. 1994) (“Even if defendants were to prevail in their efforts to cancel plaintiff’s registration, the ‘Dial-A-Mattress’ mark would still be entitled to protection as an inherently distinctive mark.”).

[33] McCarthy, supra note 13, § 19.144 (citations omitted).

[34] Id.

[35] Coach, Inc. v. Asia Pac. Trading Co., 676 F. Supp. 2d 914 (C.D. Cal. 2009).

[36] Id. at 925.

[37] Id.; cf. Howard Stores Corp. v. Howard Clothing, Inc., 311 F. Supp. 704, 705 (N.D. Ga. 1970) (no damages awarded because there was no infringing activity during the later accounting period).

[38] Coach, supra note 20, at 924.

[39] Id. at 925 (“Plaintiffs’ recovery of profits or damages under § 1125(a) is limited to that period after which Defendant had ‘actual notice’ of Plaintiffs’ registration.”).

[40] Id. at 924-25 (citing 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 19.144 (4th Ed. 2009)); see also GTFM, Inc. v. Solid Clothing, Inc., 215 F. Supp. 2d 273, 306 (S.D.N.Y. 2002) (no damages could be recovered after the mark was registered unless there was statutory notice or actual notice to the defendant.).

[41] Coach, supra note 20, at 924.

[42] Lanham Act § 7, 15 U.S.C. § 1057; see also Burger King of Florida, Inc. v. Hoots, 403 F.2d 904, 908 (7th Cir. 1968) (a federal registrant will have the right to use the mark throughout the country, except for the local area where another user had actually used the mark prior to the registration).

[43] Lanham Act § 22, 15 U.S.C. § 1072.

[44] Lanham Act § 42, 15 U.S.C. § 1124.

[45] Lanham Act § 35(a), 15 U.S.C. § 1117(a); see also Synergistic Int’l, LLC v. Korman, 470 F.3d 162, 174 (4th Cir. 2006) (noting that “the Lanham Act gives little guidance on the equitable principles to be applied by a court in making an award of damages”).


 

*New Matter is the official publication of the Intellectual Property Law Section of the State Bar of California