TIFFANY’S V. COSTCO WHOLESALE CORP. – REVIVING THE LONGSTANDING DEBATE SURROUNDING GENERICIDE OF TRADEMARKS: Part I

In this two-part post, the authors compare the jurisprudential trend regarding proprietary eponyms in the United States and India. In this post, the authors deal with the judicial trend in the United States.

Introduction

Tiffany & Co., (‘Tiffanys’) filed for trademark infringement, and trademark counterfeiting against Coscto, in 2013, for the sale of diamond rings neither manufactured nor licensed by Tiffanys as “Tiffany rings.” Costco Wholesale Corp, known as the largest membership-only warehouse club, argued that “The word Tiffany is a generic term for ring settings comprising multiple slender prongs extending upward from a base to hold a single gemstone.”[i] Rejecting Costco’s arguments, the Court in Tiffany and Company v. Costco Wholesale Corporation awarded $19.4 million in damages,[ii] and permanently stopped Costco from “using the mark Tiffany as a standalone term, not combined with any immediately following modifiers such as ‘setting,’ ‘style’ or ‘set’ in connection with its advertisement and/or sale of any products not manufactured by Tiffany’s or its affiliates.” Thus protecting its own identity, Tiffany’s not only strengthened its trademark, but also effectively placed a caveat against such illicit usage of its longstanding brand name.

Tiffany-Costco
Accessed from here.

Two issues need to be addressed herein viz. understanding genericide of trademarks, and differentiating the former from generic names that are not eligible for trademark protection. The former addresses the issue of when a name metamorphosizes from a trademark to a generic term, and is no longer entitled to protection. Better known as the genericide of trademarks, or proprietary eponyms, this has stirred debate for a number of products that we currently use. For instance, Aspirin, Escalator, Thermos, Heroin, Cellophane, and yo-yo, which were all initially trademark protected brands, are currently generic terms used to describe the respective products. The latter issue, however, addresses a basic concern in the realm of trademark law viz. differentiating terms that are not eligible for trademark protection, and those names which are protected, but have been appropriated by the public.

In this two part post, we address a comparative understanding of the jurisprudence surrounding proprietary eponyms in the United States and India. In the first part, we trace the evolution of proprietary eponyms in the United States. We specifically look at the difference between generic names, and genericide, and the threshold evolved in the United States to identify a case of genericide. In part two, we trace the evolution of genericide in India, and provide concluding remarks.

 Generic Terms and Genericide – Are They different?

Words/phrases used to describe an entire class of products vis-à-vis a specific product are generic terms. There is distinction between generic terms and genericide. Laws do not allow for trademark protection of generic term, which defines a type of product or a service. Such terms are in public domain and available for use of all.[iii] A generic term cannot acquire a secondary meaning. For e.g. the term ‘software’ cannot be used as a trademark for software products. Similarly, the term “coffee machine” cannot be registered as trademark for a particular coffee machine as it is a generic term which indicates type of product itself. The US Court of Appeals has held mattress.com as a generic term.[iv] It laid down a two-fold test which was “first to determine genus of goods or services and then whether the term to be registered is understood by members of the relevant public to refer to genus of goods or services.”[v] Thus, the courts have held that the generic term cannot be registered as trademark by adding suffix like ‘.com’, ‘.org’, etc.[vi]

Though a generic term cannot become a trademark but a trademark can become generic. This is identified as a proprietary eponym, or genericide of trademarks. An originally non-generic valid trademark can later become generic if the significance of the word to the public indicates nature or class of an article rather article’s origin.[vii] Thus it leads to cancellation of such trademarks. Aspirin, Cellophane, Escalator, yo-yo are examples of genericized trademarks. Buyers including manufacturers or retailers do not know other words for such products. For example, they associated Cellophane with a product used to keep goods protected and completely visible.[viii] Similarly Escalator was associated with moving stairways, disregarding its makers.[ix] The genericide occurs due to encouragement of its owners to use their trademarks as “household words.” But it eventually backfires and the trademark owners lose their exclusive right to use the trademark.

Genericide of Trademarks: Tracing the Jurisprudential Development

InBayer Co. v. United Drug Co.,[x] the Courts, while holding that ‘aspirin’ was a generic term, and could no longer be protected, addressed the issue of proprietary eponyms and set the threshold to identify genericide as that based on consumer perception. It held that if a buyer understands the name of the product to mean the kind or genus of product, it would not be granted any protection. However, if the consumer associates the name with a particular brand/corporation dealing in such a product, then it is entitled to protection.[xi] Subsequently, in DuPont Cellophane Co. v. Waxed Products Co.[xii] and Marks v. Polaroid Corp.[xiii], the Courts adopted this threshold, and has left the burden on defendant to show that Cellophane or Polaroid meant only the kind of good. This standard, however, has been criticised for being excessively burdensome on the defendants, to show that the name is associated with the description of a class of products, and not a

A different approach was adopted by Court in Kellog Co. v. National Biscuit Co.[xiv] Lowering the threshold for consumer understanding, the Court held that if a term designates a product and provides some indication of producer, it can still be generic unless it primarily indicates the producer.[xv] Since Kellog several cases[xvi] have combined the Bayer and Kellog thresholds to develop a third test viz. a mark must not only have some significance to the public as an indication of nature or class of an article but the principal significance must be of its nature or class rather than origin.[xvii] This test has a lower threshold for defendant’s to seek trademark cancellation than that of Bayer. But these tests are uncertain as the court in some cases like Donald F. Duncan, Inc.[xviii] have not applied any test. It has merely laid that Yo-Yo had become known and accepted by general public as a popular term for the toy.[xix] Thus, the courts have not laid any systematic standard. But it is observed that the courts tend to apply higher threshold laid in Bayer.

Xerox+Genericism+Ad2
Accessed from here.

It should be noted that not only the generic and descriptive use of term by everyone but also non-vigilant owners lead to genericness. It is the owners who actively campaign to prevent any misuse of their trademark. For example Xerox, which has become a very generic term as it is associated to process of photocopying rather than the brand. Therefore, Xerox has invested huge amount of money in marketing and advertising to avoid losing its trademark. It has launched ads which advise customers that they can copy a document in Xerox brand machine. Similarly, the term ‘Google’ which is the Google’s trademark of its own services is now used generically as a verb meaning ‘searching on internet’. Google has taken several actions by sending letters to online dictionaries and requesting not to refer search on internet as googling.’ This shows Google’s endeavour to protect its trademark by creating awareness among public.[xx] Thus, Tiffany suing Costco shows that it cares about its trademark and prevented it from becoming a generic term.

[This post has been written by Maathangi Hariharan and Jasmine Khan, 4th year and 3rd year law students at WBNUJS, Kolkata respectively and edited by Drishti Das, a 5th year law student at WBNUJS, Kolkata].

References

[i]Tiffany & Co. v. Costco Wholesale Corporation, No. 1:2013cv01041- Document 175 (S.D.N.Y. 2015).

[ii]For further clarification, the Judge of the District Court provided that Tiffany & Co is entitled to recover $11.1 million in lost profit (including interest) and $ 8.25 million in punitive damages, from Costco, amounting to a whopping $19.4 million.

[iii]Cellular Sales Inc. v. Mackay, 942 F. 2d 483, 486 (8th Circuit, 1991).

[iv]In re 1800Mattress.com IP, LLC (substituted for Dial-A-Mattress Operating Corp.), 586 F.3d 1359 US Court of Appeals for the Federal Circuit, 6 November 2009.

[v]Id.

[vi]In re Hotels.com, L.P., 87 U.S.P.Q.2d 1100, 1110-11 (T.T.A.B. 2008).

[vii]Coca-Cola Co. v. Overland Inc. 692 F. 2d 1250, 1254, (9th Circuit, 1982).

[viii]DuPhont Cellophane Co. Inc. v. Waxed Products Co. Inc., 85 F. 2d 75, 80, (2nd Circuit, 1936).

[ix]Haughton Elevator Co. v. Seeberger, 85 U.S.P.Q. 80, 81 (Comm’r Pat.. 1950).

[x]Bayer Co. v. United Drug Co., 272 F. 505 (S.D.N.Y. 1921).

[xi]Id.

[xii]DuPhont Cellophane Co. Inc. v. Waxed Products Co. Inc., 85 F. 2d 75, 80, (2nd Circuit, 1936).

[xiii]Marks v. Polaroid Corp, 237 F.2d 428 (1st Circuit, 1956).

[xiv]Kellog Co. v. National Biscuit Co., 59 305 US 111 (1938).

[xv]Id.

[xvi]King-Seeley Thermos Co. v. Aladdin Indus Inc., 321 F.2d 577,580, (2nd Circuit 1963), Feathercomb Inc. v. Solo Prods. Corp., 371 U.S. 910 (1962); E.I. DuPont de Nemours v. Yoshida Int’l. Inc., 393 F. Supp502,523, (E.D.N.Y. 1975).

[xvii]Feathercomb Inc. v. Solo Prods. Corp., 371 U.S. 910 (1962).

[xviii]Donald F. Duncan, Inc.v. Royal Tops Mfg. Co., 343 F. 2d 655 (7th Circuiy 1965).

[xix]Id.

[xx] Elliott v. Google Inc., 2014 U.S. Dist. LEXIS 127352 (D. Ariz. Sept. 10, 2014).

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