Unfair Competition: Passing Off and Secondary Meaning

1
Unfair Competition Passing Off and Secondary
Meaning
2
The Root Source of TM

• Deep common-law history
• Precursor to state and federal trademark law
• Protects marks designating source
• Elements include intent to deceive
• Intent showing gradually excused in cases of
  arbitrary or highly distinctive marks

3
Present Status

• Adjunct to trademark infringement claims
• Exists independent of trademark
• Example Warner v. Lilly (trademark claim fails
  but unfair competition claim persists)
• Palming off intending to deceive consumers to
  think that the defendants product is from
  plaintiff

4
Palming Off

• Intending to deceive consumers to think that the
  defendants product is really plaintiffs
• Elements
• First user of symbol has rights
• Against competitors subsequent use of symbol
• Confusing (or likely to confuse) consumers

5
Secondary Meaning

• See Charcoal Steak
• A secondary meaning exists when in addition to
  their literal, or dictionary, meaning, words
  connote to the public a product from a unique
  source that is, when the primary significance
  of the term in the publics mind is not the
  product but the producer

6
Types of Symbols

• Generic
• Descriptive
• Nondescriptive, including
• suggestive and
• arbitrary/fanciful marks

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The Reciprocal Relationships

• More generic symbols require higher showings of
  confusion and deceit
• More arbitrary symbols require lesser showings of
  confusion and deceit

8
Next Class Zone of Expansion and Dilution
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Unfair Competition

• Mini-FTC Acts (state law)
• FTCA, section 5 unfair competition
• Lanham Act, Section 43(a) the federal common law
  theory of unfair competition
• Fee shifting and punitive damages
• Malleable substantive outlines

10
Human Capital Protection

• Employment contracts
• Covenants not to compete
• Scope of subject matter
• Geographic scope
• Time
• Interference with Advantageous Relations
• Interference with Contractual Relations
• Breach of fiduciary duties (loyalty and care)

11
Antitrust Law The Sherman Act

• Sherman Act, section 1 agreements that
  unreasonably restrain trade
• Rule of Reason versus Per se Violation
• Horizontal and vertical restraints
• Price fixing
• Group boycotts
• Sherman Act, section 2 anti-monopoly acts and
  attempts

12
Antitrust Law The Clayton Act

• Section 2, price discrimination
• Section 3, exclusionary practices (including
  tying)
• Section 7, market concentration where the effect
  is to substantially lessen competition
• Section 8, interlocking directorates