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Guarding Your Brand: Spotting Hidden Trademark Infringements

Posted by Nolan Yamada | Oct 12, 2023 | 0 Comments

Identifying whether a product violates your trademark rights isn't always straightforward. With modern techniques cleverly masking infringements, discerning when you have grounds to sue can be challenging. Familiarity with the subtleties of this legal realm can empower you to decide on pursuing legal action. Our seasoned trademark attorneys at AH General Counsel are ready to navigate this journey with you.

As a trademark holder you likely know that protecting a trademark extends beyond mere registration. A continuing need exists to protect against infringement from competitors. Oftentimes, these competitors opt not for a copy and paste approach but for a type of infringement that employs slightly different packaging. So, companies may ask themselves when can I sue someone for trademark infringement or counterfeiting when the defendant uses the exact same mark on the exact same goods, but with slightly different product packaging?

Branding transcends just your logo. It encompasses a spectrum of visual cues, among which packaging is paramount. Recall that the purpose of trademarks is to prevent consumer confusion. The way a product is packaged can significantly influence consumer perceptions and can either strengthen or weaken brand recognition.

As such, subtle changes in packaging have become a focal point in trademark infringement disputes, especially given the increasing number of cases arising from such nuanced differences. Let's explore a few examples to demonstrate the viability of a trademark infringement or counterfeit claim. When considering whether a competitor's product is infringing on your trademark or is a counterfeit, it is important to remember that there is a distinction between the two. A trademark infringement occurs when a competitor uses a specific mark for which you hold the trademark, resulting in a likelihood of confusion between the two products. Counterfeiting is a more specialized case of trademark infringement. In that, counterfeiting  requires a spurious, willful intent to create a near duplicate of your product, rather than simply using your mark on a similar product. To put it another way, all counterfeiting is trademark infringement, but not all trademark infringement rises to the level of counterfeiting. 

Acrona v. Farmacy Beauty: Exact same trademark on different packaging 

Background: Arcona held a registered trademark for the term "EYE DEW" used for eye creams. Farmacy started selling an eye cream with the same title, leading to Arcona filing an infringement lawsuit against them, including a claim for counterfeiting.

The Dispute: Despite the product names being identical, their packaging was notably different.

Court's Take: The Court highlighted that most counterfeiting cases involve marks that are clearly identical. In this case, while the product names were the same, the different packaging played a significant role. The Ninth Circuit clarified that a counterfeit is an item pretending to be something it's not. So, in this case, while the term “EYE DEW” was a trademark infringement, its use did not rise to the level of counterfeiting, considering the obvious differences between the two products.

Decision Factors: The court determined that a consumer wouldn't confuse Farmacy's "EYE DEW" with Arcona's because:
The packaging was distinct.
Both parties prominently displayed their respective brand names.
The term "EYE DEW" was commonly used in the beauty sector, meaning consumers don't necessarily relate “EYE DEW” with a particular brand.

The court ultimately sided with the defendant, emphasizing that all counterfeiting claims require a clear likelihood of confusion among consumers, which wasn't proven in this case.

Tool Works v. J.B. Weld: Slightly different trademark on different packaging

Background: Tool Works held the registered trademark “MUFFLER WELD,” denoting a paste sealer for muffler hole repairs. J-B Weld introduced a similar product, naming it “MUFFLERWELD,” leading to Tool Works filing an infringement lawsuit, including a claim for counterfeiting.

The Dispute: Despite almost identical product names, their packaging presented significant differences.

Court's Take: The Court reasoned that for a mark to be counterfeit it must be nearly indistinguishable from a registered mark. It emphasized that visual similarity alone isn't enough for a mark to be termed counterfeit; it should also “trick” the consumer into associating it with the original product. While the product names were nearly identical, the diverse packaging ensured the two products remained distinct in consumers' eyes.

Decision Factors: The court determined that consumers would not mistake the products for one another because the unique brand logos, color themes, sizes, and particularly their dispensing mechanisms created an unmistakable distinction between the two products. These differences were pivotal in determining that the average consumer wouldn't mistake one product for the other, despite similar naming.

Concluding the case, the court acknowledged that while confusion was likely due to identical product names and functions, it wasn't to an extent that would deceive a customer into thinking one product was actually the other - a fundamental aspect of counterfeiting. Consequently, Tool Works's counterfeiting claim was dismissed, while their infringement claims were upheld, and JB Weld was ordered to remove the infringing trademarked term from their packaging. This emphasizes again that a product may be infringing on your trademark, but that infringement may not rise to the level of counterfeiting.

JUUL Labs v. Chou: Legal standard to recover damages in counterfeit cases

Background: JUUL Labs, an e-cigarette manufacturer, took legal action against Defendant Chou, accusing them of selling counterfeit "JUUL Starter Kits." 

Trademark Discrepancies: On comparison, the counterfeit JUUL products had several disparities, such as lacking serial numbers, incorrect universal product codes, and differing packaging appearances. The court agreed that the defendant's goods were undeniably counterfeit, emphasizing that identical marks used with similar products would naturally cause confusion, and that the intent of the JUUL Starter Kits was to deceive a consumer into believing that they were purchasing JUUL products. Consequently, the court sided with the plaintiff regarding the counterfeiting claims.

Crux on Damages: The Lanham Act allows plaintiffs to recover various damages for trademark infringements, especially in counterfeit cases. They could choose statutory damages ranging from $1,000 to $200,000 per counterfeit mark, which could go up to $2,000,000 if the infringement was willful. However, the court didn't side with JUUL on the damages front due to ambiguities about the defendant's intentions. An alleged employee, Yang, had potentially shown awareness of the counterfeit nature of the products. But the court needed clarity on Yang's exact relationship with the defendant. Proving willfulness requires solid evidence of intentional or "blind eye" behavior.

While the court approved JUUL's claims of counterfeiting, they held back on awarding damages. The court's decision underscores the need for clear evidence when pushing for maximum statutory damages in counterfeit cases.

Key Takeaways

Not all trademark infringements qualify as counterfeiting. Counterfeiting involves a near replication of a product to the extent that it deceives consumers into thinking it's the original product. 

In resolving disputes, courts will evaluate product packaging in applying the consumer confusion test. Courts also need evidence of intent when determining the amount of damages that should be awarded. But even when a product infringement does not rise to the level of counterfeiting, it is important to protect your mark from any potential infringement. This may be accomplished by having an attorney send a cease-and-desist letter, or by filing a lawsuit against the infringing party.

Central to this issue is whether consumers are likely to be confused, not just superficially, but to a degree where they mistake one product for another. 

In today's competitive market, defending your brand's identity is more important than ever. This already complex task is further burdened when infringers manipulate product design and packaging. We encourage you to get a basic understanding of your legal rights and to speak with an experienced trademark attorney to discuss how best to protect your brand. At AH General Counsel, seasoned trademark attorneys are dedicated to defending the integrity of your intellectual property rights.

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