MIAMI BUSINESS LITIGATION: TRADEMARK PROTECTION FOR DISTINCT TRADE NAME

Florida businesses seeking to protect their reputation may need to bring a lawsuit under the Lanham Act to protect their trademarks. Defendants in business litigation asserting trademark infringement sometimes defend on the grounds that the plaintiff’s trademark is “generic” and therefore cannot be protected under the Lanham Act. A recent case from the United States Eleventh Circuit Court of Appeals clarified when otherwise generic terms can be considered trademarks protected under the Lanham Act. The appellate court held that a trade name can be “distinct” when it incorporates two generic terms which are not typically linked together. Peter Mavrick is a Miami business litigation lawyer, and also represents clients in business litigation in Fort Lauderdale, Boca Raton, and Palm Beach. The Mavrick Law Firm represents clients in breach of contract litigation, non-compete agreement litigation, trade secret litigation, trademark infringement litigation, and other legal disputes in federal and state courts and in arbitration.

The federal Lanham Act provides protection for businesses to protect their name from its use by competitors. “The Lanham Act provides national protection of trademarks in order to secure to the owner of the mark the goodwill of his business and to protect the ability of consumers to distinguish among competing producers.” Park ‘N Fly, Inc. v. Dollar Park & Fly, Inc., 469 U.S. 189 (1985).

“A plaintiff seeking to prevail on a trademark infringement claim must show 1) that he had a valid trademark and 2) that the defendant had adopted an identical or similar mark such that consumers were likely to confuse the two.” Gift of Learning Found., Inc. v. TGC, Inc., 329 F.3d 792 (11th Cir. 2003). A business litigation defendant can prevail against a trademark infringement claim by showing that the trade name at issue is not a valid trademark. A mark that is not sufficiently “distinct” is not protected by trademark law. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992) (holding that a mark must be “distinctive” to be covered under trademark law).

While registration of a trademark with the USPTO can provide a presumption of distinctiveness, a plaintiff in business litigation over trademark infringement must prove the mark’s distinctiveness. Engineered Tax Services, Inc. v. Scarpello Consulting, Inc., 958 F.3d 1323 (11th Cir. 2020) (“Registration with the PTO entitles a mark’s holder to a presumption of either inherent or acquired distinctiveness, depending on the ground on which registration was obtained”). “[A] mark can be ‘distinctive’ in one of two ways: It can be ‘inherently’ distinctive, or it can ‘acquire’ distinctiveness over time.” Royal Palm Properties, LLC v. Pink Palm Properties, LLC, 950 F.3d 776 (11th Cir. 2020).

Courts classify the distinctiveness of a trademark into four categories: arbitrary, suggestive, descriptive, and generic. Royal Palm Properties, LLC v. Pink Palm Properties, LLC, 950 F.3d 776 (11th Cir. 2020) (describing the various categories of mark and their respective distinctiveness). A trademark which is made-up, like “Google,” or a term that has no connection with what it sells, like “Apple” computers, are considered to be inherently distinctive based on their name alone. “A suggestive mark refers to some characteristic of the goods, but requires a leap of the imagination to get from the mark to the product.” Welding Services, Inc. v. Forman, 509 F.3d 1351 (11th Cir. 2007). A mark which is suggestive are those that bear only an oblique connection with the product. An example of a suggestive mark is “Igloo” coolers. Like arbitrary marks, “[a] suggestive term requires no proof of secondary meaning in order to receive trade name protection.” Vision Ctr. v. Opticks, Inc., 596 F.2d 111 (5th Cir. 1979).

A descriptive trademark is one which “the customer who observes the term can readily perceive the nature of plaintiff’s services, without having to exercise his imagination.” Investacorp, Inc. v. Arabian Inv. Banking Corp. (Investcorp) E.C., 931 F.2d 1519 (11th Cir. 1991). An example of a descriptive mark would be “Books Books Books.” A Miami resident who was not familiar with the independent bookstore would still have a good idea as to what is sold in “Books Books Books.”

These descriptive terms can only be protected if the term has developed a secondary meaning for customers. Investacorp, Inc. v. Arabian Inv. Banking Corp. (Investcorp) E.C., 931 F.2d 1519 (11th Cir. 1991) (“Because a descriptive service mark is not inherently distinctive, it may be protected only if it acquires a secondary meaning”). A name has acquired secondary meaning when “the primary significance of the term in the minds of the [consuming] public is not the product but the producer.” Am. Television & Communications Corp. v. Am. Communications & Television, Inc., 810 F.2d 1546 (11th Cir.1987). Generic terms, like “liquor store” for a store that sells alcohol is generic, and can never be trademarked.

The recent business litigation case Engineered Tax Services, Inc. v. Scarpello Consulting, Inc., 958 F.3d 1323 (11th Cir. 2020) (ETS), evaluated whether the plaintiff’s term “Engineered Tax Services” was suggestive or descriptive. The defendant in ETS had been using the term “Engineered Tax Services” in its Google AdWords term and in a URL. The district court entered summary judgment against the plaintiff because it had found that the trademark was merely descriptive. As the plaintiff submitted evidence of secondary meaning, a finding that the mark was merely descriptive (as opposed to suggestive) was fatal to the plaintiff’s trademark claim.

The federal appellate court in ETS reversed, explaining that the district court’s analysis was too narrow when it focused heavily on how the word “engineered” was not distinct. ETS explained that the district court should have considered “engineered” together with “tax services” in evaluating whether the mark was suggestive rather than descriptive. “[O]rdinary words can be combined in a novel or unique way and thereby achieve a degree of protection denied to the words when used separately.” Vision Ctr. v. Opticks, Inc., 596 F.2d 111 (5th Cir. 1979). ETS explained that the distinctiveness of the plaintiff’s mark was heightened particularly because “tax services aren’t the sort of thing that ordinarily calls for engineering.” Engineered Tax Services, Inc. v. Scarpello Consulting, Inc., 958 F.3d 1323 (11th Cir. 2020). Because a reasonable jury could conclude that the trademark was suggestive rather than descriptive, summary judgment against the plaintiff was unwarranted.

The more distinct a trademark is, the more likely it will be protected under trademark law. The holding in ETS shows that a plaintiff business can prove distinctiveness by arguing that the mark includes terms that are not commonly connected. Peter Mavrick is a Miami business litigation attorney who also practices business litigation in Fort Lauderdale and Palm Beach. This article does not serve as a substitute for legal advice tailored to a particular situation.