Last week, the Ninth Circuit affirmed Central District of California Judge Gary Klausner’s order granting summary judgment in favor of an unincorporated association that sought to enforce its rights in unregistered trademarks pursuant to the Lanham Act. The panel’s published opinion in Southern California Darts Association v. Zaffina, et al., No. 13-55780 (Aug. 11, 2014) is available here. While the unanimous opinion is not groundbreaking, it serves as a reminder that trademarks do not need to be registered to be protectable under the Lanham Act.
Section 43 of the Lanham Act affords protection to the holder of any “distinctive” mark. See, e.g., Two Peso, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768-69 (1992). To determine whether a mark is sufficiently distinctive, courts look to see where it fits amongst the following five categories: (1) generic, (2) descriptive, (3) suggestive, (4) arbitrary, or (5) fanciful. Id. at 768. Generic marks are not afforded protection, while suggestive, arbitrary, and fanciful marks are automatically afforded protection. Id.; see also Entrepreneur Media, Inc. v. Smith, 279 F.3d 1135, 1141 (9th Cir. 2002).
Published opinions often come, as it did in Southern California Darts Association, from a challenge to a mark that falls in the “descriptive” grey area. Descriptive marks are protectable under the Lanham Act if they have a “secondary meaning.” Two Pesos, 505 U.S. at 769. Entire practice guides are written about “descriptive” marks and “secondary meaning”; we could not do justice to the topic in passing mention. In short, marks that are “unregisterable” as opposed to “not registered” likely will not be afforded protection.
So, why spend the time and money to register a trademark if the Lanham Act protects unregistered marks as well?
- A registered trademark allows you to skip the requirement and burden of proving protectability during litigation because ostensibly the step already occurred during the registration process. Money spent on the front end of protection may reduce future litigation fees.
- An unregistered mark is only protectable in the geographic area where it is used; whereas the owner of a registered mark is presumed to be the owner throughout the United States. An owner of a registered trademark that is used in San Diego may successful oppose the registration of the same mark in New York City, while an unregistered owner of the same mark will be less likely to succeed in opposition.
- In the event of litigation for infringement or dilution, the potential remedies are not same. The owners of each mark may be entitled to an injunction to prevent further use by the infringer, but the scope of the injunction will necessarily be different based upon the principle identified in the prior point. The owner of an unregistered mark may only receive an injunction in the locations where the mark is being used. Also, owners of registered trademarks are entitled to seek triple damages from the infringing party.
Returning to Southern California Darts Association, the District Court entered final judgment issuing a permanent injunction prohibiting the defendants from using the unregistered trademark and awarded the plaintiff $115,705.28 plus costs – proving the point that there is value in unregistered marks.