Beyond Direct Infringement
Posted by Caycee Boyce , Wednesday, 11 June 2008
On March 5, 2008 the U.S. Court of Appeals for the Fifth Circuit upheld a lower court ruling that misleading use of a trademark is infringement. The plaintiff, Schlotzsky’s Ltd, sued the defendant, Sterling Purchasing and National Distribution Co, under the Lanham Act. Prior to the suit, the defendant and plaintiff entered into a non-exclusive agreement where as the defendant would be one of several suppliers to the plaintiff. Soon after the agreement was made, the defendant began falsely holding themselves to be the only and exclusive supplier prompting the plaintiff to sue. Relying on section 43(a) of the Lanham Act, the Fifth Circuit Court of Appeals determined that the defendant's statements were in fact deceptive and misleading to potential business competition. Upholding the purpose of the Lanham Act as to prevent both unfair and misleading use of another’s trademark, the court ruled in favor of the plaintiff. The ruling of this case should put domain owners on notice that trademark protection spreads beyond direct infringement. Domains that potentially deceive customers and impair the trademark owner’s good will could also be the subject to a trademark action.

The ruling of this case should put domain owners on notice that trademark protection spreads beyond direct infringement. Domains that potentially deceive customers and impair the trademark owner’s good will through use of the mark in the domain name as well as in the content of the page could also be subjected to a trademark action.

By Liz Oliveira, Legal Team

Source: Sedo.com -- Reprinted with permission -- June 10, 2008
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