Note: The companies mentioned herein are merely hypothetical organizations with characteristics
developed to enable students to respond to the assignment. You may create and / or make all
necessary assumptions needed for the completion of this assignment.
In this assignment, you, in the role of a risk manager at Simply Green Products, will draft a document
that is commonly used in the business world�a memorandum to your boss.
Simply Green Products is a $10 million company that produces biodegradable packing materials that
orchards use in the Shenandoah Valley to transport their apples, peaches, and pears nationwide.
Biodegradable materials are more eco-friendly because they break down into the environment. Such
packing materials are marketed under the name �SafePack,� which is heavily advertised in trade
journals. Simply Green Products have had the name �SafePack� imprinted on all of their packing
material since 2008; however, they never filed for either state or federal trademark protection. With
the movement toward more eco-friendly agricultural production, the fact that such packing materials
are biodegradable provides a primary marketing advantage over non-biodegradable competitors.
Re: Trademarks Infringement and the Lanham Act
You asked me to look into the possibility of liability resulting from the claims of
trademark infringement. The genesis of your inquiry was the cease and desist letter sent by
Safe Choices to Simply Green Products to halt the use of the trademark SafePack. This action
can be interpreted as intent by the company to pursue legal redress in claiming ownership to
the trademark. While the company has a case since it has owned the trademark since 2002,
the determination of infringement is not made simply on registration but by a combination of
many other factors. The important thing to note is that Safe Choices has the burden of
proving trademark infringement beyond doubt for damages to be awarded. Issues of
trademark are governed under the Lanham Act.
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The Lanham Act deals with trademarks in the US and prevents a number of
malpractices including false advertising, trademark infringement and trademark dilution. The
act prohibits goods which have infringed trademarks from being imported. The civil
enforcement of the act awards damages and applies injunctions in order to restrict dilution of
trademarks and use of false descriptions. The act gives the courts the mandate to determine
whether there is a likelihood of confusion for use of a trademark or trade dress to constitute
infringement.
The act specifically states that any term, word, name, device or symbol or
combination of these or a false or misleading description of fact, designation of origin or
representation of fact that is likely to lead to a mistake, cause confusion or to deceive
connection, affiliation or association with another person, regarding the origin, approval, or
sponsorship of goods, services or other commercial activities by another person is in
contravention to it (Phelps, 1949). It extends to commercial advertising or promotion that is
misrepresentative of qualities, characteristics, nature and geographic origin of the goods,
services, or commercial activities.
The law states that people in contravention of the above specifics are liable for civil
action. Safe Choices must however prove that the actions of Simply Green hurt its business
or its customers and that the misleading or false statement was strictly in commerce and
likely to cause harm.
The Lanham Act has had extraterritorial impact, a fact that has changed in recent
times with circuit courts being given leeway to offer interpretations that may extend its scope
(Robins, & Donahue, 2013). There are three parts of the original ruling by the Supreme Court
of the US that are still basic to the law today. For infringement to be imputed, at least two of
these factors must be met (Lemley, 1999). The first is our conduct as Simply Green, which
must have a substantial effect in relation to commerce in the US. The second is that Safe
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Choices must be registered in the US and the third is that there must be an absence of conflict
with foreign law in the dispute.
Simply Green Products has been using the name SafePack since 2008 without
checking for its availability with the state or federal trademark protection. On one hand, the
activities of our company have been limited to packaging of orchards in the Shenadoah valley
and on the other our products are heavily advertised in trade journals. These two components
on the case will likely break or make it. Given these facts, the discussion below will be
centred on the facts of the case that can be argued and that will give credence to Simply
Green’s defence.
The company can argue that the products it markets are completely different from
those of Safe Choices Inc. This is because the markets that the two products target are
entirely different. For Simply Green, the SafePack trademark designates products that are
targeted at orchards that use them to transport apples, peaches and pears. The second tenet of
the SafePack product from Simply Green is that it is basically packaging that is
biodegradable. While it can be argued that both companies market packaging, the types and
target markets of these packaging are entirely different. Safe Choices uses the name SafePack
for its emergency weather kits in form of backpacks. These products are primarily for use by
individuals in camps or other activities which is different from the biodegradable packaging
that is not targeted at individuals but rather at orchards that are primarily companies.
Simply Green’s advertising and promotion avenues are trade journals. While such
journals are of wide constitution, it can be argued that it targets those that major in
agricultural activities. The Safepack trademark is thus associated with materials that are eco-
friendly and breakdown organically and thus cause no pollution. On the other hand, the
SafePack trademark from Safe Choices is primarily marketed online at safepack.com and in
sporting goods stores in the country.
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The Lanham act specifically states that the senior user, Safe Choices, which was the
first business to adopt the use of the trademark, must prove the likelihood of confusion. There
are three ways in which issues of likelihood of confusion arise. The first is through
registration, the second through inter parties’ proceedings and the third through infringement
litigation. The only way at the moment that infringement by Simply Green can be proven is
through registration where the trademark belongs to Safe Choices. However, this does not
constitute grounds for indictment as Safe Choices must prove that there was confusion for its
customers. Simply applying the trademark is not grounds enough for infringement litigation.
The most common standard for proving infringement is through the similarity of
goods provided under the trademarks. This is determined through gauging whether an
ordinary prudent purchaser would likely to purchase one item while believing that he was
purchasing the other. The use of the same trademark has been permitted in numerous cases
before where the products are completely different. In this case, the determination of
infringement will be pegged on whether a common consumer would confuse emergency kits
for biodegradable packs.
The degree of care that the consumer exercises is also important in determining
infringement. This is usually through the costs of goods being purchased. It is expected that
the buyers who make expensive purchases are likely to be more discriminatory and thus less
confused by similar trademarks. This is because these expensive items are bought less
frequently meaning that the consumer exercises a lot of care to ensure that he/she gets exactly
what is required. In essence therefore, the determination of whether there is a trademark
infringement must be considered depending on where the goods are available. The SafePack
from Safe Choices is available online as well as in sporting goods stores. SafePack from
Simply Green is not likely to be found in the same locations as the company sells its products
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directly to its customers at the point of use. It is likely that the latter SafePack is sold in bulk
while the former is sold in single units.
The matter of determining whether Simply Green has infringed on the trademark
SafePack is a delicate one. However, the simple fact is that the Lanham Act explicitly
indicates that the plaintiff has the burden of proof which is indicated by whether he/she has
suffered economic or reputational injury stemming from a deception by the defendant in the
course of advertising or other activities of commerce that causes him to lose trade from
customers (Rothman, 2005). In this case, there is no proof whatsoever that SafePack from
Safe Choices has suffered any injury as a result of the use of the trademark by Simply Green.
The other facts are that the companies deal in dissimilar goods, target different customer
segments and use different promotional avenues. These facts make the case for Simply
Green.
This therefore does not necessitate the involvement of outside counsel as the matter
can be amicably settled by the in-house counsel as it is not a complicated case of law with
many facets but rather a straightforward claim. On the face of it, the only claim that Safe
Choices has is that the trademark infringement is as a result of false designation of origin.
While this is a valid claim for the infringement case, it is just a single facet that must be
considered in light of all the other facts espoused in this memorandum.
Regards,
Cc:
Bcc:
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References
Lemley, M.A. (1999). The Modern Lanham Act and the Death of Common Sense. Yale Law
Journal, 108 (7), 1687–1715.
Phelps, D.M. (1949). Certification Marks under the Lanham Act. Journal of
Marketing, 13 (4), 498–505.
Robins, L.R., & Donahue, K. (2013). Extraterritorial reach of the Lanham Act: a viable
option. World Trademark Review, pp. 106–107.
Rothman, J. E. (2005). Initial Interest Confusion: Standing at the Crossroads of Trademark
Law. Cardozo Law Review 27 (1), 105–191.
