Trademark and Unfair Competition Law

Professor Lars Smith

Fall 1999

Final Exam

General Instructions: This exam has two sections-a multiple choice section, worth 24 points (3 points per question), and a short answer section/essay section, worth 46 points. The exam is open-book and you may take any written material that you wish into the exam with you. Do not work with any of your classmates during the exam. All statutory references are to the Lanham Act unless otherwise indicated. You have three hours to complete the exam unless otherwise instructed by the proctor.

Section I (Multiple Choice): Use the Scantron answer sheet provided and select the single best answer for each question. Clearly mark your choice on the Scantron answer sheet. Be certain to follow the proctor's instructions for filling out the Scantron answer sheet; misplaced marks may be read by the scanning machine as incorrect answers. Place your exam number on the Scantron sheet.

Question 1. In a case brought under the Federal Trademark Dilution Act, a plaintiff will be entitled to which of the following remedies:

a) Damages under Section 35(a) only.
b) An injunction only.
c) An injunction and the remedies set forth in Section 35(b) if willful intent is proven.
d) An injunction and damages the remedies set forth in Sections 35(a) and 36 as of right.
e) An injunction only, unless willful intent is proven, then the remedies set forth in Sections 35(a) and 36 as well (in the court's discretion).

Question 2. The Fourth Circuit Court of Appeals distinguished the Federal Trademark Dilution Act from state dilution laws on what basis:

a) State dilution laws generally require only proof of a likelihood of dilution, whereas the federal act requires proof of actual harm.
b) The state dilution laws incorrectly define the true nature of dilution.
c) State dilution laws cover only blurring, whereas the federal act includes both blurring and tarnishment.
d) The federal act preempts state law, so state dilution laws are no longer applicable.
e) All state dilution laws require proof of a likelihood of confusion to prevail, whereas the federal act does not.
 

Question 3. Proof of post-sale consumer confusion is needed to make out a case of
a) Foot in the door confusion.
b) Secondary confusion.
c)  Vicarious liability.
d) Contributory infringement
e) Reverse confusion.

Question 4. Proof of good faith adoption of a mark as a defense to trademark infringement is:

a) not a good defense, because plaintiff's intent is never considered in a trademark infringement case.
b) not a good defense, because no amount of defendant's good faith will overcome consumer confusion.
c) only a defense under the test for infringement in the Second Circuit.
d) a good defense, because it proves no likelihood of confusion.
e) a good defense, but only if the defendant can show that it adopted its mark within 6 months after plaintiff's first use.

Question 5. In the United States v. Torkington case, the defendant was charged with trafficking in counterfeit goods or services under 18 U.S.C. 2320. According to the Eleventh Circuit Court of Appeals, although the definitions of counterfeit mark under this statute and under the Lanham Act are to be interpreted similarly, nevertheless the Section 2320 is narrower in scope. According to the court, this is because:

a) The Due Process clause of the Fourteenth Amendment mandates that the criminal statute be read more narrowly.
b) The Lanham Act includes a remedy for trademark dilution, which Section 2320 does not.
c) Sanctions are available under Section 2320 only where the defendant knowingly uses a counterfeit mark on or in connection with the goods or services in question. Section 2320 does not define the type of purchasers of the goods or services that must be considered, and therefore only direct purchasers of the goods or services may be considered.
e) The Trademark Counterfeiting Act is merely an anti-consumer fraud statute, and protecting the reputation of the owner of the mark in question is never considered.

Question 6. The following marks fall into which distinctiveness category: SPRINT for long distance telecommunications; SUPER FRESH for supermarkets:
a) Fanciful
b) Arbitrary
C) Suggestive
d) Descriptive
e) Generic

Question 7. The following marks fall into which distinctiveness category: PLEDGE for furniture polish; MUSHROOMS for shoes

a) Fanciful
b) Arbitrary
C) Suggestive
d) Descriptive
f) Generic

Question 8. The City of Concord rezones part of the commercial district to resemble a Danish village: thatched roofed buildings, off white building structures, and coble stone streets. Billboards are out; outdoor advertising is restricted. McDonalds intends to erect its famous registered trademark golden arches outside its restaurant, and to paint its restaurant pink (which McDonalds may adopt in the future as its new trade dress for McDonalds Restaurants if it proves successful here, but for which it has obtained no registration). These are the only forms of outdoor advertising that McDonalds intends to use. Under Section 39(b) Concord may:

a) Forbid outdoor use of the arches.
b) Require McDonalds to paint the restaurant white.
C) Limit the height of billboards and signs (including the arches) to six feet.
d) either "a" or "b".
e) any of "a" "b" and/or "c".
 

Section II (Short AnswerlShort Essay):
Please confine your responses to the lined area, but do not feel compelled to fill the entire lined area. Cite case law only if the question specifically asks you to do so.

Question 9. Mike, Inc. produces a television commercial using scenes from a recent film starring Tom Willis. Mike promotes its new brand of running shoes, the EXTERMINATOR. The movie studio permitted Mike to use a scene from the film. Mike did not obtain consent from Willis. The studio did not have Willis' permission to use clips in advertising unrelated to promotion of the movie. Mike used a clip showing Willis chasing a terrorist. Mike digitally changed Willis's shoes to look like its new line of running shoes.

Willis brings suit against Mike in California. What causes of action can he bring? What are the elements of any such cause of action? What is the likelihood that Willis will prevail? Please limit your answer to California and/or federal law. Please cite controlling case law. (10 Points)
 

Question 10 Supercola Company, Inc. produces and markets SUPERCOLA cola. Supercola has sold SUPERCOLA cola throughout the United States since 1933. Supercola registered the mark with the USPTO, Registration # 1,234,567, issued June 1, 1947. Last year, Supercola had net revenues of $50 million, and spent $2.5 million on advertising. Compared to Coca-Cola, Inc., which controls 42% of the cola market, Supercola's SUPERCOLA cola drink has captured 3% of the cola market. As per capita consumption, 3% represents approximately 25 cans per year (as opposed to 356 cans per person per year for COCA-COLA). Lucrative prison contracts account for approximately 25% of SUPERCOLA sales.

ChemMax Corporation decides to branch out of its volatile chemical product base into the food industry (being one of the largest food additive manufacturers, it believes that it understands the industry). ChemMax starts marketing its own brand of soda, under the brand name HYPERCOLA. It starts a nationwide campaign, spending $20 million in nationwide advertising for its product. Within a matter of months, it has outsold Supercola in total number of sales, and has even started to make a dent in Coca-Cola's market share. Supercola's sales of SUPERCOLA drinks have dropped off precipitously to only 1% of the market. Revenues have dropped to $12 million (annualized). Many of Supercola's accounts have switched to HYPERCOLA, including many of the prisons that previously had only purchased from Supercola. Evidence shows that many of the purchasing agents at the prisons responded to a direct mail solicitation from ChemMax. When asked why they switched, a number of the purchasing agents stated that they thought they were ordering the same product. Others said it was because HYPERCOLA was substantially cheaper.

Supercola brings suit against ChemMax, alleging infringement of the SUPERCOLA mark, under Sections 32 and 43 of the Lanham Act. No other claims are made. Please analyze Supercola's claim, including a review of the factors necessary for Supercola to win its claim under the Second Circuit's Polaroid Corp. v. Polarad Electronics Corp. case. (10 Points)
 

Question 11. Relying on the facts in Question 10, please review the remedies available to Supercola, and the likelihood of obtaining such relief What sections of the Lanham Act are applicable? (5)
 

Question 12. First Air, Inc. owns the registered mark FIRST AIR for airline services. Sue Jones, realizing the economic potential of the Internet, registers the domain name "firstair.com" with Network Solutions, Inc. (NSI). Jones sets up a web site using the domain name, and merely has, a screen on the site that says, "This site for sale. Please contact Sue Jones at 603-555-2222." No other activity is conducted on the site. First Air brings suit against NSI to cause NSI to transfer the domain name to First Air. What grounds for infringement should First Air assert against NSI. What elements must First Air allege to make a prima facie case? (7 points)
 

Question 13. Assume the facts from Question 12, except: Jones maintains an informational web site dedicated to the Wright brothers' first flight at Kitty Hawk, N.C., and does not offer the domain name for sale. The site is limited to a description of the event, the plane, the brothers and other historical facts. Jones does not sell anything. If First Air sues Jones under 43(c), what are her best arguments to avoid liability? (7 points)
 

Question 14. ChemMax manufactures NEW SHINUVIER laundry detergent, Procter & Gamble, Inc. manufactures TIDE, the leading product in the detergent industry. ChemMax promotes NEW SHINEMER with a print advertising campaign, which in the first ad states: "If you like Tide, you'll love New Shimmer." In the second ad, ChemMax says: "NEW SHINMER cleans floors 30% faster than Tide, and leaves a shine that lasts 45% longer." ChemMax believes this statement is true, based on its tests. Procter & Gamble sues. What are P&Gs causes of action, and what is the likelihood of success. (7 points)

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