Senior Common Law Rights In Trademark Prevail Over An Incontestable Federal Registration
This week, a panel of the Ninth Circuit upheld a jury's trademark infringement verdict against the holder of an incontestable federal registration in the marks due to a senior user's state common law rights in the marks. Watec v. Liu.
The Watec case arose from a distribution contract for cameras with the WATEC and WAT marks. The plaintiff, Watec Japan, had manufactured and marketed the cameras in the United States before entering into an oral exclusive distribution contract with the defendants, Watec America and Watec America's president. Watec America then registered the WATEC and WAT marks with the United States Patent and Trademark Office, and the registration later became incontestable under 15 U.S.C. § 1065. Watec America later began to use the marks on cameras manufactured by others, and Watec Japan sued for trademark infringement and breach of contract.
Watec America asserted that it could not be liable for trademark infringement because it held an incontestable federal registration for the marks, and Watec Japan did not have rights as a senior user.
Under 15 U.S.C. § 1065, a federally registered trademark that is used continuously for five years becomes “incontestable,” entitling the holder to an exclusive right to use the mark that can only be defeated on specifically enumerated grounds. The introductory clause of section 1065 provides one of these exceptions to incontestability: that a senior user can assert its rights in the mark acquired under state law by a use continuing from a date prior to the federal registration of the mark. 15 U.S.C. § 1065.
The Ninth Circuit affirmed the jury's finding that Watec Japan had senior rights in the marks that were infringed by Watec America. Watec Japan had acquired nationwide rights under state common law by its marketing efforts before the exclusive distribution agreement. It maintained those rights by continuous use of the marks using Watec America as its licensee.
In other issues in the case, the Ninth Circuit held that the district court's use of remittitur properly cured an excessive trademark infringement award so that a new trial was not required. On defendants' challenge to the attorneys' fees award, the Ninth Circuit remanded for a finding by the district court as to whether this was an "exceptional" case justifying the award of attorneys' fees. In awarding fees, the district court had mentioned the jury's finding that Watec America had intentionally infringed the mark. The Ninth Circuit held that this statement was not sufficient because the district court had the obligation to make its own finding as to whether the conduct was malicious, fraudulent, deliberate or willful conduct.
The Watec case arose from a distribution contract for cameras with the WATEC and WAT marks. The plaintiff, Watec Japan, had manufactured and marketed the cameras in the United States before entering into an oral exclusive distribution contract with the defendants, Watec America and Watec America's president. Watec America then registered the WATEC and WAT marks with the United States Patent and Trademark Office, and the registration later became incontestable under 15 U.S.C. § 1065. Watec America later began to use the marks on cameras manufactured by others, and Watec Japan sued for trademark infringement and breach of contract.
Watec America asserted that it could not be liable for trademark infringement because it held an incontestable federal registration for the marks, and Watec Japan did not have rights as a senior user.
Under 15 U.S.C. § 1065, a federally registered trademark that is used continuously for five years becomes “incontestable,” entitling the holder to an exclusive right to use the mark that can only be defeated on specifically enumerated grounds. The introductory clause of section 1065 provides one of these exceptions to incontestability: that a senior user can assert its rights in the mark acquired under state law by a use continuing from a date prior to the federal registration of the mark. 15 U.S.C. § 1065.
The Ninth Circuit affirmed the jury's finding that Watec Japan had senior rights in the marks that were infringed by Watec America. Watec Japan had acquired nationwide rights under state common law by its marketing efforts before the exclusive distribution agreement. It maintained those rights by continuous use of the marks using Watec America as its licensee.
In other issues in the case, the Ninth Circuit held that the district court's use of remittitur properly cured an excessive trademark infringement award so that a new trial was not required. On defendants' challenge to the attorneys' fees award, the Ninth Circuit remanded for a finding by the district court as to whether this was an "exceptional" case justifying the award of attorneys' fees. In awarding fees, the district court had mentioned the jury's finding that Watec America had intentionally infringed the mark. The Ninth Circuit held that this statement was not sufficient because the district court had the obligation to make its own finding as to whether the conduct was malicious, fraudulent, deliberate or willful conduct.
posted by at 4/03/2005 12:00:00 PM
0 Comments:
Post a Comment
<< Home