Trademark infringement is a violation of an owner's rights in a trademark. Alleging trademark infringement is the main method in which owners enforce their rights. A claim of trademark infringement of a federally registered trademark must be brought in federal court, and a plaintiff asserting such a claim needs to show (1) ownership of a federally registered mark and (2) that the defendant's use of the mark in commerce without the plaintiff's consent creates a likelihood of confusion, mistake, or deception as to the origin of the defendant's product or service.
Federal courts use a balancing test to determine "likelihood of confusion" based on the following eight factors:
Courts apply the test in a flexible manner; in some cases only a few of the factors may be relevant, but cases generally are not decided based on one factor alone. Some factors, such as evidence of actual confusion and similarity of the marks, can be very important in determining trademark infringement, but courts must still consider other factors if they are relevant to a particular case.
A defendant can be liable for trademark infringement even if they did not directly infringe (i.e., did not actually use another's trademark) under a theory of contributory trademark infringement, which occurs if someone (1) intentionally induces someone else to infringe a trademark, or (2) continues to supply the plaintiff's product to one whom the defendant knows or has reason to know is engaging in trademark infringement of the product.
Manufacturers or distributors of goods are parties usually accused of contributory trademark infringement, but the theory has been applied more broadly in some cases to include website operators and service providers.
The federal statute covering trademarks is called the Trademark Act of 1946 (also known as the Lanham Act). Under the Lanham Act, a claim for false designation of origin, false description, or false or misleading representations of fact in connection with goods or services in commerce can be brought, even if the trademark is not registered.
Such unfair trade practices include "palming off" and "reverse palming off." Palming off happens when a mark is used on products or services not authorized by the mark owner, and the defendant unfairly gets the benefits of the value of the mark. Reverse palming off occurs when someone removes a mark from a product and replaces it with an entirely different mark.
The Anticybersquatting Consumer Protection Act (ACPA), which is also part of the Lanham Act, allows trademark owners to sue when a defendant (1) has a bad faith intent to profit from a mark, and (2) registers, traffics in, or uses a domain name that is identical or confusingly similar to that mark.
Trademark owners can also enforce their rights under state law causes of action, which may include false advertising, unfair competition, and misappropriation.
Plaintiffs that win trademark infringement cases can receive damages, which may include recovering the defendant's profits or payment for any other any damages sustained, as well as the costs of litigation, including reasonable attorney's fees in exceptional cases. Injunctions (court orders for the defendant to stop infringing) can also be obtained. If cybersquatting under the ACPA is involved, the plaintiff may elect to receive statutory damages ranging from $1000 to $100,000 per domain name infringed.
Several defenses are available in trademark infringement cases. Defendants can allege that there is no likelihood of confusion because there are differences between the marks, or the goods or services associated with the marks are different. The defenses of laches or estoppel can be used if the trademark owner has not enforced its rights within a reasonable amount of time. In some cases, abandonment of the mark by the owner can be asserted, particularly in cases where the mark owner licensed a trademark in an unrestricted manner. Other potential defenses include fair use and nominative use, which generally applies to comparisons of products in advertising, parody and non-commercial uses of trademarks in academic articles, media reports, or commentary.