The Sad Fate That Can Await A Super Successful Brand

Judith Soto,

Aspirin, Elevator, Pilates, Hoover, Jacuzzi, Frisbee. Once upon a time, these were all just trademarks, but then they became a product name in everyday language. No one says they "vacuum-cleaned" the lounge or that they threw a "flying disc" in the park anymore! For some territories in which the trademark has lost its source indicator role, it can become the name of the product. If a court decides that a trademark is generic, then everyone, including competing businesses, is free to use these terms in their language and branding.

Some highly successful trademarks have suffered every brand's worst nightmare – they are victims of genericide - and of their own success. The brand name has become the way consumers identify a particular product as opposed to its source.

Brand strength

When creating a new brand for your business you want to look for a strong trademark that will be both an asset and add value to your business. There are three factors that should ideally be incorporated when creating a strong trademark, namely: uniqueness, investment potential and protectability.

And, there are five main categories of trademarks used in trademark law to determine protectability (listed here in ranking order from strongest to weakest):  

  • Fanciful
  • Arbitrary
  • Suggestive
  • Descriptive
  • Generic

Generic marks are not registrable under trademark law, because the entire market needs to be able to use those particular words to describe their goods and services. (An example, that is often used by trademark attorneys when explaining this issue to their clients, of a trademark that has been found to be generic is ‘Apple’ when used to market or sell apples). 

Genericness is not just related to trademark applications however. Even after choosing, screening, clearing and registering a strong wordmark it is important to maintain that word’s source indicator role. Well-known trademarks are more vulnerable to dilution and to being informally used as a product name. The owners need to be extremely careful and strictly monitor the use of these kinds of marks.

Trademark dilution

During genericide, A trademark is diluted by use as the common descriptive name of the product it serves. To avoid genericide, brand owners are advised to make careful use of the trademark and to monitor their trademark use in their industry. They need to ensure that the use should always keep the role of source indicator. 

Being inconsistent with the correct use of your mark or letting others use it improperly - as a product name or in a descriptive manner - can lose you the rights to keep others from using your trademark - this is known in trademark law as genericide

It can be a challenge in today’s digital world to be vigilant and to monitor the use of your trademarks continually. The prolific rise of online shopping in recent months, as well as e-commerce intermediaries such as eBay and Amazon has led to many challenges for brand owners in this regard. New data compiled by Wolfgang Digital reveals that retail sites in Ireland alone this year saw a 40% increase in traffic volumes, when compared to the pre COVID-19 period, and up from a 32% increase a week earlier.

Our preliminary search tool, ExaMatch, uses powerful, legal technology and is transforming the trademark screening process. It is also a useful tool for searching trademark applications by product description to your own brand name to help combat genericity. Using our Product Tab you can search easily and quickly for new trademark applications by product type and get instant results. For example if you type the word “IPOD” into the ExaMatch search bar you will immediately see all trademark applications that include “IPOD” as a description of the product. And, you can filter by Nice Class, Registry, Status, Owner Country, Region and Opposable - so if there is perhaps a particular region or Registry that interests you, it is easy to see if any concerning trademark applications have been filed there.


Genericide

A trademark application can be rejected based on genericness. And, even a registered trademark can be subjected to a cancellation action. So, it is of the utmost importance not only to choose the right wording but also to use it in the right manner - as a source indicator.

When genericide happens, rival firms swoop in to attach the competitor’s mark to their own products. And, if these rival firms can argue persuasively that the protected mark is now a common term that is understood as the product name by a consumer, the trademark dies and takes the brand to its grave.

A senior London IP lawyer, Allan Poulter at international law firm Bird & Bird  told the BBC:

"It can be a big problem, because the brand stops being a badge of origin and just becomes a generic term. The brand is often the most valuable asset of a company - its exclusivity is what puts it apart. If you get to the stage where you no longer have that, the brand is finished."

However, not all attempts to claim that a mark is generic succeed.

Tiffany & Co v Costco

In 2017, a federal district court ordered Costco to pay at least $19.4 million to the famous jewellers, Tiffany & Co, settling a long-running trademark infringement battle concerning generic diamond engagement rings bearing the "Tiffany" name. Judge Laura Taylor Swain in the Southern District of New York ruled that Tiffany is entitled to $11.1 million as profits for trademark infringement, plus interest, representing triple its lost profits, plus $8.25 million in punitive damages awarded by a jury last October. Furthermore, Costco was barred from using "Tiffany" as a stand-alone term unless it was in conjunction with the words "setting," "set" or "style."  

Costco had argued that "Tiffany" had become a generic term and "the diamond ring in question had a pronged setting style that is commonly known as a 'Tiffany' setting." Furthermore, Costco stated that by using the word "Tiffany" in its signs, it was to "convey only that the rings had this style of setting — not that the rings were Tiffany & Co. brand rings."

However, the court ruled that there was insufficient evidence to show that the use of the Tiffany name "was not an intentionally deceptive marketing ploy."

Deciding whether a mark has become generic

The standard for determining whether a trademark had become generic was set out by Judge Learned Hand in Bayer Co v United Drug Co., 272 F. 505, 509 (S.D.N.Y. 1921).

"The single question, as I view it, in all these cases, is merely one of fact: What do the buyers understand by the word for whose use the parties are contending? If they understand by it only the kind of goods sold, them [sic], I take it, it makes no difference whatever what efforts the plaintiff has made to get them to understand more. He has failed, and he cannot say that, when the defendant uses the word, he is taking away customers who wanted to deal with him, however closely disguised he may be allowed to keep his identity."

Almost 100 years later, the Federal Circuit and the Trademark Trial and Appeal Board now conduct a two-part inquiry: "First, what is the genus of the goods or services at issue? Second, is the term sought to be registered . . . understood by the relevant public primarily to refer to that genus of goods or services?" 

How to avoid falling victim to genericide

Having a trademark attorney manage your brand’s anti-genericness strategy and maintain full control/monitor the use of your trademark will help to ensure that your mark does not become a victim of its own success.

By monitoring both new trademark applications and the product descriptions that are used in an industry, brand protection managers act swiftly to deter any irregularity. Cease and desist letters are typically used to notify an individual or organization that they are engaging in infringing/dilution activities. In this sense a brand protection manager is monitoring both industry use and also new trademark applications (by looking for product descriptions).

Many famous brands have also done much good work in trying to address this issue, like Lego, who favor using “Block bricks” in their marketing material and social media, rather than the plural “Lego”. Education of employees, licensees, distributors, stockists and consumers about the issue is also key. Helping them all to make proper use of the company trademarks and understand why they are distinctive will go a long way in helping to mitigate the risk of a brand becoming a victim of its own success.  

Genericness dispute unpacked 

Episode 3 of our new legal “Talkin’ Marks” podcast covers the hot topic of genericness. In this episode the co-hosts, Zac and Gokcen are joined by a special guest, Judith Soto. Soto is Director of Customer Success at TrademarkNow and is a former corporate and intellectual property attorney. 

They discuss the recent U.S. Supreme Court case of the USPTO v Booking.com - and also take a look at the recent innovation by the court system in the United States which has found a new way to work in spite of today’s health and safety challenges!   

Why not do your part in the mission to help educate the general public in the proper use of trademarks to help avoid genericide?  Get early access to our new podcast episode and please share the news! Talkin' Marks Podcast - Subscribe and stay tuned for new episodes coming soon!

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