IP Infringement vs. Fair Use? Protecting Federal Trademarks in New York State

Seems like a lot of high-profile trademark issues are happening all over New York. A recent U.S. federal matter outlines the basics of federal trademark litigation and the arguments a New York business may use to attempt to enforce a trademark against a violator of your trademark.

A federal judge in New York State recently ruled that The Car-Freshner Corporation, which makes the pine tree-shaped air fresheners that hang in millions of vehicles across the country, has demonstrated that it may lay claim to the tree-shaped symbol through its various federal trademark registrations and more than 60 years of history.

NY Trademarks

Car-Freshner claims that Sun Cedar, a non-profit business based out of Kansas, violated the Lanham Act (better known as the “Trademark Act”) and New York Law by making and marketing a car air-freshener in the same tree-shape and using a virtually identical symbol that Car-Freshner has registered as its trademark as early as 1961. It further argued that Sun Cedar’s designs are designed to confuse consumers and unfairly use Car-Freshner’s product identity and good-will built up over decades for gain.  Thus, in short, Sun Cedar was free riding off the good name of Car-Freshner.

The Trademark Act of 1946

The Lanham Act (also known as the Trademark Act of 1946) is a U,S. federal statute that governs trademarks, service marks, and, in general, unfair competition. It sets out procedures for federally registering trademarks, states when owners of trademarks may be entitled to federal judicial protection against infringement, and establishes other guidelines and remedies for trademark owners.

Sun Cedar argued its use of the widely recognizable evergreen design is permitted under the statutory “fair use” exception to the Lanham Act. It argued that the tree symbol it uses differs from Car-Freshner’s because it uses the word “Sun” in the base of the logo that appears on its packaging, website and other social media accounts.

Fair Use Doctrine

The Fair Use Doctrine protects certain uses of registered trademarks from infringement claims when the use of the name, term, or device is “a use, otherwise than as a mark, of a term or device that is descriptive of and used fairly and in good faith only to describe goods or services of [a] party, or their geographic origin.”  Sun Cedar argued that this exception would allow it to use the registered “Little Trees” shape in ways that “describe the goods or services” for which their cedar fresheners are used, but not as marks identifying the products themselves.

But, the judge disagreed, ruling that Sun Cedar did use the tree symbol as a mark to, among other things, confuse consumers and that it has not acted in good faith. In ruling this way, the federal judge ruled that Car-Freshner presented a plausible claim that Sun Cedar’s adoption of a cedar tree design that is nearly identical to it’s registered tree design marks was intended to trade on the good will of Car-Freshner’s trademark by creating confusion in the minds of consumers.

This is by no means the end of the argument. This decision was preliminary in nature and only rules that Car-Freshner has sufficiently pleaded a cause of action. It remains to be seen whether Sun Cedar’s defense of “fair use” holds water.

There are lessons your New York business can take away from this matter and its preliminary decision. You must be diligent and proactive in defending your trademarks, including registering them. Also, “fair use” does not mean “free use” of a registered mark, and you must consider your good faith basis for “fair use” before you start using it in commerce for yourself.

Business identity and good-will are vital characteristics built by the business owner’s growth over time. Do not let someone get a “free ride” on your hard work.

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