Law of the Game on Joystiq: Trademark infringement

Each week Mark Methenitis contributes Law of the Game on Joystiq, a column on legal issues as they relate to video games:

There's been a lot of talk about copyright piracy lately, largely from a few high profile convictions. What we've been short on lately is some high profile trademark infringement suits, but trademark piracy in the gaming world can and has been as rampant as copyright piracy. In fact, the concept of what all constitutes trademark infringement isn't even as well known as copyright infringement. Everyone knows about Napster and warez, but these are all copyright issues. So I'd like to take some time to talk about trademark infringement and piracy.

We've been through the basics of trademark before, and that's a good place to start if you're a complete trademark neophyte. However, with a basic understanding of what is trademarked, it's easy to see the areas where trademarks can be infringed. Basic infringement is based on the idea that someone will take advantage of a trademark to confuse the consumer into purchasing their product based on the reputation of the trademark they're infringing. Put into simpler terms, if you believe Nintendo is a good brand, then you'd be likely to buy a Nintendo product. Therefore, if I make a product and put "Nintendo" on it, then you'd be likely to buy my product because of the illusion that it's a Nintendo product. I get the benefit of selling more product by infringing Nintendo's trademark, so if there wasn't a penalty, trademarks would be infringed on a regular basis.

Of course, not all forms of trademark infringement are as obvious as labeling a product with another brand name. Taking another example, the company who makes the cardboard boxes that Xbox 360 is shipped and sold in has a license from Microsoft with respect to the trademarks on the box. If I were to reproduce that box without permission, I would be infringing on the trademark. This actually happens often in the electronics world, especially with cellular phones. People who sell refurbished phones want boxes, and they do not always get the boxes from a licensed provider.

Another common form of infringement is to make something with a name that is "confusingly similar" to an existing product. This is the "likelihood of confusion" standard, and it's the most common infringement claim and available as a Federal suit. In summary, it's the idea that a consumer would be confused into thinking a product is made by someone else. For example, if I made a "Sorny GameStation," it's likely that that product would be considered to infringe on the Sony and PlayStation trademarks. Likelihood of confusion is a little more complex than that, however, as there have been a number of factor based tests for whether or not something is confusingly similar. Commonly used are the Polaroid factors, which are: strength of the mark (based on the scale discussed previously), the proximity of the goods in the marketplace, the actual similarity of the marks, any evidence of actual confusion, the similarity or commonality of marketing channels used, the degree of sophistication of the purchaser, and the alleged infringer's intent.

Proximity pertains to where the goods are actually sold. For example, if two things are both sold at an electronics store, then confusion is more likely, where as a frozen onion ring branded Halo wouldn't be sold anywhere near Halo (the game), so confusion is unlikely. Actual similarity of the marks can be based on use of the same name, names that sound the same, or logos that look the same. Any level of similarity is possibly confusing. Evidence of actual confusion could be based on surveys of potential buyers or anecdotal based on actual experiences. Similarity in marketing channels is much like proximity, but focuses on where the products are likely to be advertised. The sophistication of the buyer is basically a question of how much caution the average buyer would exercise. Basically, if the average purchaser tends to be someone who would know that the other product isn't related, then the likelihood of confusion is low. For example, given that Disgaea 3 is a fairly niche game, the average purchaser would be likely to know a lot about the game and wouldn't likely be confused by another product with the Disgaea brand name. Finally, there's intent, which is straight forward. If the infringer was infringing with the purpose of benefiting from the other brand, then they are more likely to be punished for infringement.

The other major Federal infringement action is based on dilution, but at a federal level this is limited to "famous" marks. Acording to the law, "famous" is determined by: "The duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties; The amount, volume, and geographic extent of sales of goods or services offered under the mark; The extent of actual recognition of the mark; and Whether the mark was registered under the Act of March 3, 1881, or the Act of February 20, 1905, or on the principal register." For the most part, however, a mark's status as famous is fairly apparent. Nintendo, Microsoft, Sony, Bungie, Blizzard, EA, Ubisoft, Activision, etc. are all famous. I've talked about one form of dilution before

, known as blurring, in regard to the Wiimote controversy. I haven't previously touched on tarnishment, however. Tarnishment is where a mark actually makes the original, famous mark worth less or damages its reputation. This can be by offering a shoddy product under a similar name or by offering a product under a similar name that is associated with what can be considered "undesirable" contexts, such as sexual, illegal, or obscene activities. So, I could be sued for tarnishment if I made towels under the name Microsoft that were just poor quality or if I made a sex toy called the "PlayStation."

There are also a variety of state-level claims, but these vary between states, in addition to international trademark infringement protections based on treaties, most notably the Paris Convention and TRIPs. Generally, however, it's either a federal claim for infringement or dilution that is brought in these cases, especially with respect to products that are sold on a national or global level like video games. Trademark suits are often brought to "defend the mark," as a trademark can be canceled or declared invalid unlike a copyright. As a trademark owner, you have to protect your trademark or potentially lose it, so it's often the case that trademark based cease and desist letters and lawsuits are much more quickly set loose than copyright ones.

Mark Methenitis is the Editor in Chief of the Law of the Game blog, which discusses legal issues in video games. Mr. Methenitis is also a licensed attorney in the state of Texas with The Vernon Law Group, PLLC and a member of the Texas Bar Assoc., American Bar Assoc., and the International Game Developers Assoc. Opinions expressed in this column are his own. Reach him at: lawofthegame [AAT] gmail [DAWT] com.

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