Gale Encyclopedia Of American Law 3Rd Edition Volume 10 P9 pdf

Reynolds, Osborne M., Jr. 2009. Local Government Law. 3d ed. St. Paul, Minn.: West. CROSS REFERENCE Zoning. TOWNSHEND ACTS The Revolutionary War in America was the result of a series of acts levied against the colonists by the English Parliament. One of these measures, the Townshend Acts, not only contributed to the American Revolution but precipitated the BOSTON MASSACRE as well. In 1767 Parliament decided to reduce the property tax in England. To compensate for the deficit, Charles Townshend, chancellor of the exchequer, proposed legislation that would raise revenue from various taxes directed at the colonists. These laws, called the Townshend Acts, imposed duties on the importation of such articles as lead, glass, paint, tea, and paper into the colonies. The money collected from the colonists was to be applied to the payment of wages of English officials assigned to the colonies. In addition to the taxes, the acts also provided for the maintenance of the American Board of Customs Commissioners in Boston. A third aspect of the legislation involved the disbanding of the New York legislature. This assembly had staunchly opposed and refused to accept the Quartering Act of 1765, and all its meetings were suspended until it complied with the unpopular act. Antagonism between the colonists and English officials over the Townshend Acts increased, and English troops were sent to quell disturbances. Agitation continued, and on March 5, 1770, the Boston Massacr e occurred when English soldiers fired into a crowd of hostile colonists, killing five men. The colonists drafted nonimportation agree- ments and boycotted English goods. English merchants felt the loss of revenue, and in 1770 the Townshend Acts were repealed with the exception of a tax on tea. This tax, retained to reaffirm the right of Parliament to levy taxes on the colonists, led to the Boston Tea Party. FURTHER READINGS Knight, Carol Lynn H. 1990. The American Colonial Press and the Townshend Crisis, 1766–1770: A Study in Political Imagery. Lewiston, Mass.: E. Mellen Press. Thomas, Peter David Garner. 1987. The Townshend Duties Crisis: The Second Phase of the American Revolution, 1767–1773. New York: Oxford Univ. Press. CROSS REFERENCES Boston Massacre Soldiers; Stamp Act; “Townshend Acts” (Appendix, Primary Document). TOWNSHIP In a government survey, a square tract of land six miles on each side, constituting thirty-six square miles. In some states, the name given to the political subdivision of a county. CROSS REFERENCE Town. TRACING An equitable remedy that allows persons to track their assets after they have been taken by FRAUD, misappropriation, or mistake. The remedy is also used in BANKRUPTCY, commercial transactions, and property disputes in marital dissolution cases. Persons who have been victims of fraud, misappropriation, or mistake may reclaim their property through the equitable remedy called tracing. Tracing makes such victims secured creditors in bankruptcy claims, which means by law they are the first to claim their share of a bankrupt’s asse ts. Tracing can be invoked only if two requiremen ts are met: victims must be able to identify their property and must show that they have a claim of restitution in kind. This means a victim must prove that he has interest in a specific property and that he is not simply someone to whom the defendant owed a debt. Once an individual satisfies these requirements a bankruptcy court will declare that the property never belonged to the person in bankruptcy, so it does not belong to the bankruptcy trustee, who distributes the pro- ceeds to the bankrupt’s creditors. The tracing of assets can be difficult once money is moved into bank accounts or property is sold and the proceeds used to purchase other property. However, there are many tracing rule s that aid courts in determining if and how much a person can recover. For example, if a person is defrauded of real estate and the perpetrator of the fraud sells the property and invests the proceeds in corporate stock, the victim may be able to claim the stock. The victim could not use tracing to recover the real estate from a third person who was a GOOD FAITH purchaser GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 68 TOWNSHEND ACTS (i.e., the individual did not know that the seller had defrauded the victim) and had paid a reasonably equivalent value. The UNIFORM COMMERCIAL CODE (UCC) gives secured creditors the right to trace their collateral into proceeds of its sale and to trace these proceeds through commingled bank accounts. Therefore, if a business pledges their fleet of trucks to secure a loan, the creditor is entitled to the proceeds of the sale of the trucks by the debtor. Tracing is also used in FAMILY LAW where a divorcing HUSBAND AND WIFE had separate assets before and during the mar riage. Tracing can be used to determine if these assets have been commingled, such as joint contributions toward the purchase of a home. In this area, as in other fields covered by tracing, the rules can become very complex and require the testimony of expert witnesses versed in accounting and sophisticated financial transactions. TRADE DRESS A product’s physical appearance, including its size, shape, color, design, and texture. In addition to a product’s physical appear- ance, trade dress may also refer to the manner in which a product is packaged, wrapped, labeled, presented, promoted, or advertised, including the use of distinctive graphics, con- figurations, and marketing strategies. In intel- lectual property law, a CAUSE OF ACTION for trade dress infringement may arise when the trade dress of two businesses is sufficiently similar to cause confusion among consumers. In such situations the business with the more estab- lished or recognizable trade dress will ordinarily prevail. Two remedies are available for trade dress infringement: injunctive relief (a court order restraining one party from infringing on another’s trade dress) and money damages (compensation for any losses suffered by an injured business). Like TRADEMARKS, trade dress is regulated by the law of UNFAIR COMPETITION. At the federal level, trade dress infringement is governed primarily by the Lanham TRADEMARK Act (15 U.S.C.A. § 1051 et seq.); at the state level, it is governed by similar INTELLECTUAL PROPERTY statutes and various common-law doctrines. Both state and federal laws prohibit businesses from duplicating, imitating, or appropriating a competitor’s trade dress in order to pass off their merchandise to unwary consumers. To establish a claim for trade dress infringe- ment, a company must demonstrate the dis- tinctiveness of its product’s appearance. Trade dress will not receive protection from infringe- ment unless it is unique, unusual, or widely recognized by the public. Courts have found a variety of trade dress to be distinctive, including magazine cover formats, greeting card arrange- ments, waitress uniform stitching, luggage designs, linen patterns, cereal configurations, and the interior and exterior features of commercial establishments. In certain contexts courts may find that distinctive color combina- tions are protected from infringement, as when a federal court found the silver, blue, and white foiled wrapping in which Klondike ice cream bars are packaged to be part of an identifiable trade dress (AmBrit v. Kraft, 812 F.2d 1531 [11th Cir. 1986]). Goods that are packaged or promoted in an ordinary, unremarkable, or generic fashion normally receive no legal protection under the law of trade dress. For example, containers shaped like rockets and bombs are considered hackneyed devices for marketing fireworks and will not be insulated from trade dress infringe- ment. At the same time, something as simple as a grille on the front end of an automobile may be considered sufficiently original if the manu- facturer takes deliberate and tangible steps to promote that aspect of the vehicle over a long period of time. The law of trade dress serves four purposes. First, the law seeks to protect the economic, intellectual, and creative investments made by businesses in distinguishing their products. Second, the law seeks to preserve the good w ill and reputation that are often associated with the trade dress of a particular business and its merchandise. Third, the law seeks to promote clarity and stability in the marketplace by encouraging consumers to rely on a business’s trade dress when evaluating the quality of a product. Fourth, the law seeks to increa se competition by requiring businesses to associate their own trade dress with the value and quality of the goods they sell. Trade dress is different from a trademark, SERVICE MARK,orTRADE NAME. Trademarks are words, symbols, phrases, mottos, logos, emblems, and other devices that are affixed to GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION TRADE DRESS 69 goods to demonstrate their authenticity to consumers. Levi’s jeans, Nabisco cookies, Bic pens, Ford trucks, Rolex watches, and Heinz ketchup are just a few examples of well-known trademarks. Service marks identify services rather than goods. Roto-Rooter, for example, is the service mark of a familiar plumbing company. Trade names distinguish entire busi- nesses from each other, as opposed to their individual goods and services. Coca-cola, for example, uses its trade name to distinguish itself from other soft drink manufacturers. Under state and federal law, it is advantageous for businesses to register their trademarks, service marks, and trade names with the government. Conversely, trade dress has no formal registra- tion requirements and receives legal protection simply by being distinctive and recognizable. FURTHER READINGS American Law Institute. 1995. Restatement (Third) of Unfair Competition. New York: American Law Institute. Bouchoux, Deborah E. 2008. Intellectual Property: The Law of Trademarks, Copyrights, Patents, and Trade Secrets for the Paralegal. 3d ed. Clifton Park, N.Y.: Delmar Cengage Learning. Dorr, Robert C., and Christopher H. Munch, eds. 1999. Trade Dress Law. 2d ed. Gaithersburg, Md.: Aspen Law & Business. Harris, Ray K., and Stephen R. Winkelman. 2003. “Trade Dress: Always in Style?”IP Litigator 9 (May-June). Mohr, Stephen F. 1995. Recent Trends in the Law of Trade Dress. New York: Practising Law Institute. Prosser, Elise K., and James K. Smith. 2002. “Accounting for Trade Dress: Companies Need to Accurately Value their Product’s Unique Packaging or Appearance.” Journal of Accountancy 194 (November). Trade Dress, Product Configuration & Design Patent Protec- tion. 2003. Mechanicsburg: Pennsylvania Bar Institute. TRADE NAME Names or designations used by companies to identify themselves and distinguish their busi- nesses fro m others in the same field. Trade names are used by profit and nonprofit entities, political and religious orga- nizations, industry and agriculture, manufac- turers and producers, wholesalers and retailers, sole proprietorships and joint ventures, partner- ships and corporations, and a host of other business associations. A trade name may be the actual name of a given business or an assumed name under which a business operates and holds itself out to the public. Trade name regulation derives from the COMMON LAW of UNFAIR COMPETITION. The common law distinguishes between TRADEMARKS and trade names. Trademarks consist of sym- bols, logos, and other devices that are affixed to goods to signify their authenticity to the public. The common law of trad e names encompasses a broader class of INTELLECTUAL PROPERTY interests, including TRADE DRESS and service marks. Trade dress is used by competitors to distinguish their products by visual appearance, including size, shape, and color, whereas service marks are used by competitors to distinguish their services from each other. Gradually, the law of trade dress and service marks has evolved into separate causes of action, independent from the law of trade name infringement. To maintain a CAUSE OF ACTION for trade name infringement, a plaintiff must establish that it owned the right to operate its business under a certain name and that the defendant violated this right by use of a deceptively similar name. The right to use a particular trade name ordinarily is established by priority of adopt ion. In states that require registration of trade names, a business may acquire the rights to a trade name by being the first to file for protection with the appropriate governmental office, usually the SECRETARY OF STATE. In states that do not require registration, a business may acquire the rights to a trade name through public use, which means that the law will afford protection only if it can be demonstrated that a business and its trade name have become inseparable in the public’s mind. Under federal law businesses may acquire the rights to a trade name only through regular and continued public use of an individual name. Federal la w will not protect trade names that are used sporadically or irregularly. Once a business has established the right to use a particular trade name, it must then prove that the defendant fraudulently attempted to pass itself off as the plaintiff through use of a deceptively similar name. Not every trade name that resembles an existing one will give rise to liability for infringement. The law will not forbid two unrelated businesses from using the same trade name so long as their coexistence creates no substantial risk of confusion among the public. For instance, two businesses may call themselves “Triple Play” if one business is a video store and the other is a sports bar and grill. By the same token, the law permits businesses in different geographic markets to use identical trade names, unless the good will GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 70 TRADE NAME and reputation of an existing business extend into the market where a new business has opened. A greater degree of protection is afforded to fanciful trade names than to names in common use. Generic words that are widely used to describe any number of businesses in the same field may not be appropriated by a single competitor. For example, a professional part- nership of attorneys would receive no trade name prote ction for emblazoning the name “law office” across its front doors. Such a name would be co nsidered generic in nature, telling consumers nothing unique or unusual about that particular business. The same partnership would receive full protection for a name that identifies the firm by the individual nam es of each partner in the office. Trade name regula tion serves four purposes. First, the law seeks to protect the economic, intellectual, and creative investments made by businesses in distinguishing their trades. Sec- ond, the law seeks to preserve the good will and reputation that are often associated with a particular trade name. Third, the law seeks to promote clarity and stability in the marketplace by encouraging consumers to rely on a merchant’s trade name when evaluating the quality of its merchandise. Fourth, the law seeks to increase competition by requiring businesses to associate their own trade names with the value and quality of their goods and services. Both state and federal laws provide protec- tion against trade name infringement. At the federal level, trade names are regulated by the Lanham TRADEMARK Act (15 U.S.C. § 1051 et seq.). At the state level, trade names are regulated by analogous intellectual property statutes and various common-law doctrines. In general, the law of trade name infringement attempts to protect consumers from deceptive trade practices. The law does not treat con- sumers as unwitting dupes and may require them to make reasonable distinctions between competitors under appropriate circumstances. When consumers have been deceived by use of a deceptively similar trade name, an injured business may avail itself of two remedies for infringement: injunctive relief (a court order restraining one party from infringing on another’s trade name) and money damages (compensation for any losses suffered by the injured business). CROSS REFERENCE Lanham Act. TRADE SECRET Any valuable commercial information that pro- vides a business with an advantage over compe- titors who do not have that information. In general terms trade secrets include inventions, ideas, or compilations of data that are used by a business to make itself more successful. Specifically, trade secrets include any useful formula, plan, pattern, process, program, tool, technique, mechanism, compound, or device that is not generally known or readily ascertainable by the public. Whatever type of information is represented by a trade secret, a business must take reasonable steps to safeguard it from disclosure. Absolute secrecy is not required, however. Commercial privacy need only be prote cted from ESPIONAGE that can be reasonably antici- pated and pre vented. Trade secrets may be revealed to agents, employees, and others ordinarily entrusted with such infor mation, so long as it is understood that the information is confidential and disclosure is forbidden. At the same time, keepin g information strictly confi- dential does not make it a trade secret unless the information is useful or valuable. Information that is common knowledge will never receive protection as a trade secret. Information must rise to a sufficient level of originality, novelty, or utility before a court will recognize it as a commodity. Similarly, merely because something has been classified as a trade secret does not make every public disclosure of it the theft of a trade secret. For liability to attach for trade secret theft, the owner of valuable commercial infor- mation must demonstr ate that it was appropri- ated through a breach of contract, a violation of a confidence, the use of surreptitious surveil- lance, or other improper means. For example, most employees who work in a commercially sensitive field are required to sign a contract prohibiting them from disclosing their employ- er’s trade secrets to a competitor or the general public. These contracts normally bind employ- ees even after their employment relationship has ended. In the absence of a contractual obligation, employees and others may still be held liable for disclosing a trade secret if a court finds they GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION TRADE SECRET 71 had reason to know that the information was valuable and were expected to keep it confiden- tial. For example, engineers and scientists who consult on a commercial project are ordinarily bound by a duty of strict confidentiality that precludes them from later sharing any informa- tion they acquire or using it to facilitate their own research. Although many businesses re- quire consultants to sign a nondisclosure agree- ment before beginning work on a sensitive project, this duty of confidentiality arises from the circumstances surrounding a particular venture, independent of any formal agreement reached between the parties. Imposition of liability for theft of a trade secret is not contingent upon a relationship between the owner of commercial information and the individual or entity that appropriated it. Liability may be premised solely on the means used to acquire confidential commercial infor- mation. Industrial espionage, which includes both aerial and ELECTRONIC SURVEILLANCE,isan indefensible means of acquiring a trade secret. TRESPASS, BRIBERY, FRAUD, and MISREPRESENTATION are similarly illegal. However, the law permits businesses to purchase a competitor’s products and subject them to laboratory analysis for the purpose of unlocking hidden secrets of the trade. Called “reverse engineering,” this process is considered by some courts to be the only proper means of obtaining valuable commercial information without the owner’s consent. The owner of a trade secret has the exc lusive right to its use and enjoyment. Like any other property right, a trade secret may be sold, assigned, licensed, or otherwise used for pecu- niary gain. If the owner of a trade secret knowingly permits it to enter the public domain, however, he has waived the right to its exclusive use and enjoyment. An owner who has been injured by the wrongful disclosure or appropriation of a trade secret may pursue two remedies: injunctive relief and damages. An INJUNCTION (a court order restraining or com- pelling certain action) is the proper remedy when the owner of a trade secret desires to prevent its ongoing use by the individual or entity who wrongfully appropriated it. Money damages are the appropriate remedy when theft of a trad e secret has resulted in a measurable pecuniary loss to its owner. FURTHER READINGS Cundiff, Victoria A., and Salem M. Katsh. 2002. Trade Secrets 2002: How to Protect Confidential Business & Technical Information. New York: Practising Law Institute. Lockerby, Michael J., ed. 2000. The Trade Secret Handbook: Protecting Your Franchise System’s Competitive Advan- tage. Chicago: Forum on Franchising, American Bar Association. Quinto, David, and Stuart Singer. 2009. Trade Secrets: Law and Practice. New York: Oxford Univ. Press. TRADE UNION An organization of workers in the same skilled occupation or related skilled occupations who act together to secure for all members favorable wages, hours, and other working conditions. Trade unions in the United States were first organized in the early nineteenth century. The main purpose of a TRADE UNION is to collectively bargain with employers for wages, hours, and working conditions. Until the 1930s, trade unions were at a sever e disadvantage with management, mainly because few law s recog- nized the right of workers to organize. With the passage of the National Labor Relations Act ( WAGNER ACT) of 1935 (29 U.S.C.A. § 151 et seq.), the right of employees to form, join, or aid labor unions was recognized by the federal government. Trade unions are entitled to conduct a strike against emplo yers. A strike is usually the last resort of a trade union, but when negotiations have reached an impasse, a strike may be the only bargaining tool left for employees. There are two principal types of trade unions: craft unions and industrial unions. Craft unions are composed of workers per- forming a specific trade, such as electricians, carpenters, plumbers, or printers. INDUSTRIAL UNION workers include all workers in a specific industry, no matter what their trade, such as automobile or steel workers. In the United States, craft and industrial unions were repre- sented by different national labor organizations until 1955. The craft unions that dominated the American FEDERATION of Labor (AFL ) opposed organizing industrial workers. Trade unions and labor unions are often thought of as being the same entity. However, trade unions differ in that their members are all working in the same trade, whereas labor unions have workers in various fields. During the 1930s, several AFL unions seeking a national organization of industrial workers formed the Committee for Industrial Organization (CIO). The CIO aggressively GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 72 TRADE UNION organized millions of industrial workers who labored in automobile, steel, and rubber plants. In 1938, the AFL expelled the unions that had formed the CIO. The CIO then formed its own organization and changed its name to Congress of Industrial Organizations. In 1955, the AFL and CIO merged into a single organization, the AFL-CIO. Membership in U.S. trade unions has fallen since the 1950s, as the number of workers in the manufacturing sector of the U.S. economy has steadily declined. Union membership in 1995 comprised just 14.9 percent of the American workforce, compared with a high of 34.7 percent in 1954. Labor Union In the United States, labor unions are legally recognized as representatives of workers in many industries. In 1935, Congress passed the National Labor Relations Act (NLRA) to encourage a healthy relatio nship between pri- vate-sector workers and their employers. Prior to the NLRA, employers were not required by law to recognize a union or to bargain in GOOD FAITH . In the public sector, most labor unions are for public workers such as teachers and police. However, in the corporate sector, unions represent workers of various fields. Most labor unions in the United States have membership in the American Federation of Labor–Congress of Industrial Organizations (AFL-CIO) or the Change to Win Federation (CWF), which split from the AFL-CIO in 2005. The government saw a decline in unions in the manufacturing sector and a swift rise in the service industry in 2007. This was due mainly to the shrinking automotive and manufacturing industries. The Employee Free Choice Act (H.R. 800, S. 1041), which has been very controversial, would enable working people to bargain for better wages, benefits, and working conditions by restoring workers’ freedom to choose for themselves whether to join a union. It would strengthen penalties for violation of employee rights when workers seek to form a union and during first-contract negotiations; provide me- diation and ARBITRATION for first-contract dis- putes; and allow employees to form unions by signing cards authorizing union representation. Trade unions and labor unions are often thought of as being the same entity. However, trade unions differ in that their members are all working in the same trade , whereas labor unions have workers in var ious fields. CROSS REFERENCE S Collective Bargaining; Labor Law. TRADE USAGE Any system, custom, or practice of doing business used so commonly in a vocation, field, or place that an expectation arises that it will be observed in a particular transaction. The concept of trade usage recognizes that words and practices take on specialized mean- ings in different areas of business. Though these common understandings are not necessarily set out explicitly in a written sales or service agreement, the courts will generally employ them when construing a commercial contract. In the United States, the UNIFORM COMMERCIAL CODE (UCC), which has been adopted in some form in all fifty states, permits trade usage to be used in the interpretation of sales agreements. Trade usage supplements, qualifies, and imparts particular meanings to the terms of an agreement for the purpose of the agreement’s interpretation. Contractual language cannot be interpreted out of the context of the agreement of the parties. Union Membership, in 2008 SOURCE: U.S. Department of Labor, Bureau of Labor Statistics, Union Membership, annual. Male Female White Black Hispanic Total Number of members (in thousands) 8,938 12,863 2,178 1,960 16,098 20,0000 5,000 10,000 15,000 7,160 Member demographic ILLUSTRATION BY GGS CREATIVE RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION TRADE USAGE 73 The enforcement of contractual promises protects the justified expectations of the prom- isee, the person to whom the promises were made. Trade usage emphasizes such expecta- tions. If a particular trade follows a practice so regularly that the promisee is justified in expecting that the promisor considered that practice when making the promise, the practice becomes a part of the agreement between the parties. Sometimes usage becomes so common in an industry that written trade codes are compiled to provide specific language on contract interpretation. Section 1-2.05 of the UCC adop ts the principle of trade usage. In a contractual dispute, the party who asserts a trade usage must prove the “existence and scope of such usage.” If the trade usage is proved, a court may use it to “supplement or qualify terms of an agreement.” The express terms of an agreement and trade usage must be construed “wherever reasonable as consistent with each other.” If the construction is unreasonable, however, the court will ignore trade usage and apply the express terms of the agreement. In the absence of evidence to the contrary, courts assume that when persons in business employ trade terms, they intend the terms to have their commercial significance. To counter this assumption, the parties must expressly state within the contract their intention to render the terms devoid of their trade significance and reduce them to their ordinary meanings. The failure to do so indicates the parties’ intention to use the trade terms according to their commercial meanings. Trade Usage as Extrinsic Evidence The contract language does not have to be ambiguous before a court may consider trade usage. To protect against unfair surprise, however, evidence of trade usage is inadmissible unless sufficient notice has been provided to the other party. Trade usage is considered EXTRINSIC EVIDENCE , that is, evidence that is inadmissible or not properly before the court, jury, or other determining body. Several factors are relevant to determining whether the alleged introduction of extrinsic evidence constitutes reversible error, including whether the extrinsic material was actually received, and if so, how; the length of time it was available to the jury; the extent to which the jury discussed and considered it; whether the material was introduced before a verdict was reached, and if so, at what point in the deliberations it was introduced; and any other matters that may bear on the issue of whether the introduction of extrinsic material affected the verdict. CROSS REFERENCES Sales Law; Extrinsic Evidence. TRADEMARKS Trademarks are distinctive symbols of authenticity through which the products of particular manu- facturers or the salable commodities of particular merchants can be distinguished from those of others. A trade mark is a device, word or combina- tion of words, or symbol that indicates the source or ownership of a product or service. A trademark can take sever al forms, including a name, such as Adidas; a symbol, such as McDonald’s golden arches; or a combination of the two, such as when the NIKE name is written with the “swoosh” symbol beneath it. In very limited cases , a shape or even a distinctive color can become a trademark. People rely on trademarks to make in- formed decisions about the products they buy. A trademark acts as a guarantee of the quality and origin of a particular good. A competing manufacturer may not use ano ther company’s trademark. The owner of a trade mark may challenge any use of the mark that infringes upon the owner’s rights. The presence of trademark protection for the name or logo of a company or product is often indicated by the small symbol of an R in a circle placed near the trademark. The R means that the mark is a registered trademark and serves as a warning that the law prevents unauthorized use of it. A party may indicate that it is claiming rights to a particular mark by displaying a TM rather than an R symbol. Marks bearing the TM symbol are not regis- tered, but the presence of the symbol shows an intent to register. Origins and Development of Trademark Law Trademark law in the United States is governed by the Trademark Act of 1946, also known as the LANHAM ACT (15 U.S.C.A. § 1051 et seq.). The Lanham Act defines trademarks as includ- ing words, names, symbols, or combination s GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 74 TRADEMARKS My Commission Expires:_____________________________________ Notary Public: _________________________________________ TM 1 (7/99) Trademark/Service Mark Application COMMONWEALTH OF VIRGINIA STATE CORPORATION COMMISSION APPLICATION FOR REGISTRATION OF A TRADEMARK OR SERVICE MARK (Please type or print) Applicant (owner) name and address:________________________________________________________________________________ ______________________________________________________________________________________________________________ Contact person name and address:__________________________________________________________________________________ _________________________________Daytime phone:__________________________ Fax number:____________________________ Applicant is a:_______________________________________Applicant's state or jurisdiction of formation: ________________________ (entity type, e.g., corporation, partnership, etc.) Kind of mark (check one):Trademark _______ Service Mark _______ Identify the trademark or service mark (or attach an exhibit of the exact mark): _______________________________________________ ______________________________________________________________________________________________________________ Class number(s) of goods or services (see 21 VAC 5-120-100):____________________________________________________________ Describe the product(s) or service(s) the mark represents (identifies):_______________________________________________________ _____________________________________________________________________________________________________________ Date mark was first used anywhere by applicant or applicant's predecessor: _________________________________________________ Date mark was first used in Virginia by applicant or applicant's predecessor: _________________________________________________ PLEASE NOTE: A specimen of the mark must accompany this application. The applicant asserts that it is the owner of this mark and that the mark is in use in the Commonwealth of Virginia. No other person has registered this mark or has the right to use this mark in Virginia, either in the identical form thereof or in such near resemblance thereto as to be likely, when applied to the goods or services of such person, to cause confusion or mistake, or to deceive. (NOTE: The application must be signed in the name of the applicant, either by the applicant or by a person authorized by the applicant. The application must be sworn to by the person who signed the name of the applicant.) Signature:________________________________________________________________Date: _________________________________ Signer’s Name:____________________________________________________________Title:__________________________________ (print or type) State of:___________________________________________, County/City of:_________________________________________, to-wit: The foregoing application was subscribed and sworn to before me by _______________________________________________________ on the _______________________________ day of __________________________________, ______. A sample trademark/ service mark application. ILLUSTRATION BY GGS CREATIVE RESOURCES. REPRODUCED BY PERMISSION OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION TRADEMARKS 75 thereof that a person uses or intend s to use in commerce to distinguish his or her goods from those made or sold by another. Potential trademarks are categorized by the functions they perform. Within trademark law are several specialized terms used to catego rize marks that may be subject to protection. The categories include form, mode of use, and, most com- monly, strength. The four subcategories of strength are generic, descriptive, suggestive, and ARBITRARY or fanciful. A generic name is the commo n name for a product and can never be considered a trademark. Terms such as shoe, ball, hat, and lightbulb are all generic product names. Some marks that do not begin as generic may later become generic if the public adopts the mark as the general name for that product. Examples of marks that were not originally generic but later became so are cellophane and aspirin. Generic marks are not “strong” because they are not distinctive. To give trademark status to the generic or common name of a product would prevent all other manufa cturers of the product from identifying it. A descriptive term tells the consumer something about the product and may only become a trademark after it has acquired SECONDARY MEANING. This occurs after a period of time during which the term’s association with that product is exclusive. This acquisition of secondary meaning is sufficient to make a mark distinct, meaning that in the eyes of consumers it has come to represent that products bearing the mark come from a particular source. The mark “Brooklyn Dodgers” is an example of a descriptive mark that is exclusively associated with a professional baseball team formerly from New York. A suggestive term, rather than describing the product, merely makes a subtle suggest ion about the type of product and its qualities. It requires consumers to use their imaginations to make the intellectual jump between the sugges- tion and the actual product. For those reasons, it can be a trademark immediately upon use. Examples of suggestive marks are Orange Crush (orange-flavored soft drink), Playboy (sexually oriented magazine for men), and Ivory (white soap). When distinguishing between descriptive and generic terms, courts try to determine the viewpoint of the prospective consu mer. Courts look for the meaning that the buyer of a product assigns to the contested word. Courts may also look at the term as used by dictionar- ies, third parties, trademark owners, texts, PATENTS, newspapers, literature, and surveys. Use of a term as a common name indicates that the word may be the generic name of a product. The strongest marks are arbitrary and fanciful marks, which need not acquire second- ary meaning. They are strong because they bear little or no relationship to the products with which they are affiliated, and thus their use is not unfair to others trying to compete in the marketplace with similar products. Arbitrary marks are common words used in an uncom- mon way and are used in connection with the goods in a way that does not describe the goods or suggest anything about them. Examples include Camels in reference to cigarettes and Dial as the name of a brand of soap. Fanciful words, by contrast, are invented and (at least at the time they are first applied to the goods) have no dictionary meaning. Examples of fanciful marks are Kodak, Exxon, and Rolex. These considerations force a producer to select or create a symbol or name for its product that is suitable for trademark protection. A producer labors to create a good name for a product, and a protected trademark prevents competitors from unfairly capitalizing on the reputation of that name. When trying to decide what mark is appropriate, the potential trade- mark owner should keep in mind a fundamental rule of trademark selection: In most situations, one will not be allowed to use a trademark that another entity already uses. Before an entity incorporates under a certain name or attempts to sell a service or product bearing a particular name, the entity should conduct a search or hire an attorney to investigate prior or existing use of the name. Those companies that fail to conduct this kind of a search or blatantly ignore existing use of a trademark are likely to face a lawsuit by any existing owner of the mark. Such a lawsuit may lead to a court order to stop any infringing use and an award of damages to the holder of the mark. Uniqueness is a major consideration to the potential trademark owner, regardless of whether the mark is descriptive, suggestive, and arbitrary or fanciful. The fewer unique char- acteristics a mark possesses, the less legal protection it receives. To compete, the potential GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 76 TRADEMARKS trademark owner must consider whether others need to use a particular mark in conjunction with a product. A unique mark that bears little relationship to the product is preferred over a mark that is more generic. The Lanham Act distinguishes trademarks from trade names and service marks and also addresses certification marks and collective marks. A SERVICE MARK is used to identify and distinguish the services of one company from another, such as Sears for retail stores, and American Express for credit cards. A TRADE NAME or commercial name distinguishes and identi- fies a business. The same name or portion of a name may also serve as a trademark, trade name, or service mark. An example is the name Ford Motor Company, which is the trade name of a company that builds and sells cars and trucks that bear the trademark Ford. In short, trademarks apply to products, service marks to services, and trade names to businesses. Certification marks endorse products and certify approval of their origin, quality, or authenticity. A certification mark is not the property of the maker of the products upon which the mark will be affixed. Examples are the Union Label in garments and various seals of approval. When the provider of goods or services belongs to an association, it often advertises or attaches a collective mark to announce that relationship. The mark is used on products or services not provided by the owner of the mark, typically as a symbol guaranteeing quality and taking advantage of the supposed benefits to the consumer that stem from the product’s associa- tion with the owner of the mark. Trademark Registration Traditionally, trademark rights depended on prior use, but since 1988 a party with a genuine intent to use a mark may apply for trademark registration. The applicant must intend to use the mark in commerce and must intend to do so in order to sell a product, not merely to reserve rights for future use . Registration begins with application to the commissioner of patents and trademarks in the PATENT AND TRADEMARK OFFICE. Registration of a mark means that others w ill be presumed to know that the mark is owned and protected. By itself, registration is considered evidence that the registrant has ownership and that the registration is valid. Registration benefits the trademark owner because it suggests that the registrant did everything necessary to protect its mark. While trademark rights actually stem from use, a party may have difficulty convincing a court that it had good reasons not to register a mark for which it now claims a protected right. Such is the case particularly when a claimed symbol’s status as a trademark is uncertain, such as in a dispute over the design of a product as a trademark. One may apply with either the principal register or supplemental register of the Patent and Trademark Office. The principal register is for arbitrary, fanciful, suggestive, or descriptive marks that have acquired secondary meaning or distinctiveness. The supplemental register is for descriptive terms capable of acquiring second- ary meaning. Once a mark establishes secondary meaning, it can be transferred to the principal register. Registration with the principal register is preferable to supplemental registration for many reasons. Principal registration is proof that the mark is valid, registered, and the INTELLECTUAL PROPERTY of the registrant, which has exclusive rights to use the mark in commerce. Further, a registered mark is presumed to have been in continuous use since the application filing date. After five years of continuous use, a registered mark may not be contested. Registration with the principal regis- ter means that a potential infringer will be considered to know about the registrant’s claim of trademark ownership. The owner of a mark registered with the principal register has the right to BRING SUIT in federal court. Those who COUNTERFEIT registered marks face criminal and civil penalties. The owner of a trademark who registers with the principal register and deposits the registration with the U.S. Customs Service can prevent goods bearing infringing marks from being imported. A mark on the supplemental register may become a trademark, but its status as such has not yet been determined. For this reason, the presumption created by registration with the principal register, that the registrant can be the only valid owner, does not apply to supplemen- tal registration. The owners of registered trademarks can lose their rights in a number of ways. When a trade or the general public adopts a trademark as the GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION TRADEMARKS 77 . the law permits businesses in different geographic markets to use identical trade names, unless the good will GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 70 TRADE NAME and reputation of an. organization of industrial workers formed the Committee for Industrial Organization (CIO). The CIO aggressively GALE ENCYCLOPEDIA OF AMERICAN LAW, 3RD E DITION 72 TRADE UNION organized millions of industrial. OF GALE, A PART OF CENGAGE LEARNING. GALE ENCYCLOPEDIA OF AMERICAN LAW, 3 RD E DITION TRADE USAGE 73 The enforcement of contractual promises protects the justified expectations of the prom- isee,