Trademarks may help protect your company’s branding, but they have limitations. Learn where and how trademark rights are restricted.
Here’s what we’ll talk about:
Functionality Restriction
Limits of Territory
Fair Use Restriction
Import Restrictions
When it comes to safeguarding your intellectual property, having a registered trademark may be quite beneficial (IP). Although a registered trademark brings indisputable benefits and rights, there are limits that assist prevent trademark system misuse. The most significant constraint is the scope of what may be trademarked. Although the possibilities are practically unlimited, trademarks may not protect intellectual property that is functional, without geographical limits, susceptible to fair use, or transmitted downstream after the IP owner’s sale. Here’s a quick rundown of trademark law restrictions.
Functionality Restriction
A trade dress trademark protects the distinctive design of things such as water bottles, shop layouts, or any number of commercial goods. A certain form of a water bottle, for example, may be trademarked. A form that significantly increases grip or otherwise improves the use of the bottle, on the other hand, is likely to cause problems when it comes to registering a trademark for such design characteristics. This restriction is intended to prevent competitors from abusing the trademark system by registering functional parts and then seeking trademark rights against a rival.
Functionality cannot be protected if it is “essential to the use or purpose of the object, or if it impacts the cost or quality of the article.” Yet, depending on the design or functioning, it may be patentable or copyrighted.
Limits of Territory
One feature of trademark law is that it is restricted to the territory of a single nation (called “territoriality”). There are also transnational trademarking systems, in which many nations sign a convention that permits a single trademark to exist in numerous signatory countries without the trademark owner having to apply in each country separately. In the European Union, for example, a Community Trademark registered with the Office for Harmonization of the Internal Market applies Union-wide. Similarly, a Madrid Protocol trademark may provide a trademark owner protection in over 92 nations and territories with a single application.
A trademark registered in the United States, on the other hand, is exclusively enforceable in the United States. This constraint is magnified when it comes to unregistered trademarks (also known as common law marks), which may normally only be enforced locally, i.e. at the state level. Only a USPTO-registered trademark confers national trademark rights.
Fair Use Restriction
The notion of fair use also relates to trademark law. In many circumstances, it is a defense against trademark infringement accusations. Fair use permits the use of another’s trademark to allude to or mention the branded products or services. For example a vehicle repair business might state “We fix TOYOTA cars”. This is known as nominative fair usage.
The third sort of fair use is descriptive fair use, which enables the use of a trademark to describe a product or service in an ordinary, descriptive way. You may, for example, characterize a dessert as “sweet and tart” without violating the SWEETART trademark.
Since many trademarks are based on phrases that are regularly used in ordinary English, a trademark owner’s rights cannot be enforced if his brand is properly used in a fair use context. Even if a trademark is arbitrary and whimsical, the owner may be unable to assert his or her rights if it is used in a nominative or descriptive way.
Import Restrictions
Products are often sold in multiple nations, with varying packaging and price. In the United States, a trademark owner cannot prevent “parallel imports,” which occur when someone imports products without the approval of the trademark owner in that nation. If you possess a trademark in both the United States and the European Union, and you sell your goods for less money in the European Union. If someone buys your items in the European Union, imports them to the United States, and then resells them for less money, you probably won’t be able to sue under trademark law. If the items are imported from a nation where they are not trademarked, the trademark owner may be entitled to prevent the import.
