What is a trademark? Even if you've never thought about how a trademark is defined, every single day your decisions, from what you purchase to what you wear, are influenced by trademarks. Legally, a trademark is a word, mark, etc. that serves as a source identifier. To everyone else not in the legal realm, it’s when you see a logo, or part of a logo, and it reminds you of a brand. Or even a word used with a certain type of font in certain colors, and you can identify what company it is – even if you’ve never used their products before.
Trademarks are important as they can convey a lot of information to a consumer, without even saying a word. Take, for example, a brand you love and communicate with often. Most likely, when you see their name or their logo, you’re gut reaction is positive. What about a brand you’ve had a bad experience with, or you’ve heard from multiple sources, that others have had negative experiences with? When you see that logo or company name, you may associate negative connotations with that brand – even though you personally have no experience. Trademarks can, and often are, the most valuable asset of a company. A company that has put in the work and effort to make their products the best they can while providing excellent communication and customer service is strengthening their trademark (and other IP rights) each time they do. Even though a trademark is intangible, consumers can very much feel when a trademark is strong or not.
Think about your favorite running shoes brand, like Nike. You’ve purchased Nike running sneakers your whole life and know that you love the way they feel. Now imagine you walk into Nordstrom and see a pair of sneakers on display with a swoop on the side for only $40 (steal). You grab your size and check out. Within your first mile of running, however, your feet are suffering and covered in blisters. If trademark protection did not exist, that means anyone, anywhere, would be able to use the Nike swoosh on their products. The result? A situation like above; you no longer can expect certain things from the products you purchase. The shoes you purchased at Nordstrom weren’t actually Nike, they were by some poorly designed shoemaker. You can image the same thing would occur with food: your favorite chip baring the same logo on the front tastes completely different than the last time you purchased it. Trademark protects both the consumer and the brand.
When we talk about counterfeit products in commerce, we are talking about a product that bears a trademark of another in an attempt to deceive the purchaser as to who made the product. Think of Canal Street selling handbags with Louis Vuitton’s registered “LV” trademark. A bag with such a trademark would be considered a counterfeit. What about a bag shaped just like Chloé's Faye bag, but does not say “Chloé” anywhere on it? Assuming Chloé has no trade dress protection for its bag (to be discussed in another post!) then that bag would be considered a knock-off, since it isn’t illegally using a “trademark.” The difference might seem minute to you, but in the eyes of the law, they are very different. Counterfeits are illegal. They are monitored by both local and federal police, and the damages can be great. The crime is called trademark infringement, which occurs when someone makes an unauthorized use of a trademark on or in connection with goods or services in a manner that is likely to cause confusion. Knock-offs, however, are only illegal if a brand can prove that consumers are actually confused, or mislead, as to the source or origin of the product.