For about a week last month, my Internet browser thought I was in Canada. And, like a friend who returns with an accent after a week-long vacation in London, this was more a source of curiosity than frustration. I first realized the quirk upon a visit to Google. Instead of finding myself at the familiar .com, I was redirected to a .ca site. Upon entering my query – “donuts” – Canadian Google thought I’d be most interested in visiting Tim Hortons. Eh? Unfamiliar, I scanned the Tim Hortons website to learn the tale of a small Ontario donut shop that quickly spread throughout Canada and much of the Northern United States. With ®s and ™s littered across the page, the intellectual property nerd in me was buzzing. How was I to interpret these symbols?
Generally, the purpose of a trademark notice symbol is to notify the public that the words or designs they accompany should be interpreted as identifiers of the source of particular goods or services. More specifically, the ® signals that a mark is registered, and the ™ (or its service mark counterpart, SM) signals a more general (e.g., common law) claim to a mark. In an infringement suit, a successful plaintiff may only recover lost profits if the plaintiff can show that the infringer had actual notice of the existence of a prior trademark registration, and is typically only rewarded an injunction. However, a trademark registrant who consistently posts the ® alongside the relevant mark is deemed to have provided constructive notice of registration, and is therefore relieved of the burden of having to establish actual notice. This effectively increases the damages available to registrants in an infringement suit. On the other side of the coin, false marking — i.e., improperly using the ® to signal that an unregistered mark is registered — is tantamount to fraud and can open the “false marker” up to civil, and sometimes even criminal, liabilities. For example, in Japan, false marking can be penalized with up to three years’ imprisonment. While often not enforced, false marking is to be avoided. Thus, properly marking trademarks is fundamental to smart trademark practice, as it not only increases the potential damages available in the event of infringement, but it also prevents liabilities for false marking. But how did all of this apply to Tim Hortons, whose donut empire straddles borders and whose website is globally accessible? What was “proper marking” in this context? To the credit of Tim Hortons, and its clearly vigilant trademark counsel, my quick search of the Canadian and U.S. trademark databases revealed that all of the marks accompanied by a ® on the website were registered in both Canada and the United States. My worries for Tim Hortons allayed, I moved on to the underlying issues.
What if these marks weren’t registered in both countries? Would Tim Hortons, as a Canadian company, have a defense against claims of false marking in the United States? Would the analysis change if I had visited the website from a country where the marks aren’t registered? Is the ® totally useless on the Internet? Is use of it too much of a liability? But if no one used it, how would anyone provide constructive notice of registration, and thereby increase their potential recovery for infringement? And, perhaps the scariest question of all: How was I, the intellectual property attorney, supposed to advise global companies to use of the ® and the ™ on the Internet? I decided I needed to go back to the source: Google.ca.
In an attempt to discover the standard practices, I searched for companies that I knew had interests across the globe, ones which (despite their legal might) simply could not have registered their marks in every burg and pueblo on Earth. I found several approaches.
The first is to maintain a separate website for each country, making the intended audience of the symbols very clear. This serves two purposes. First, it allows the company to use the appropriate symbol for each country, ensuring both that the company provides constructive notice when using the ® correctly and doesn’t incur liabilities for using it incorrectly. Related, it also allows a company to use the non-English equivalent of the ® where appropriate — e.g., MR for “Marca Registrada” in Spanish-speaking countries or MD for “Marque Déposée” in French-speaking countries. Second, it gives the company a defense to false-marking claims arising from countries where a mark isn’t registered. After all, it’s hard to say with a straight face that you thought a ® signaled that a mark was registered in Madagascar when you were visiting www.companypanama.pa. The benefits were clear, but I wondered whether the vigilance proved economical. Sure, liabilities were less likely and increased damages potential, but how much time and money was spent maintaining distinct websites?
The second approach answered my question, and quite clearly: Remove all ®s and ™s. This approach has the obvious benefit of eliminating the basis for a false-marking claim, but seems sort of like getting rid of the food in your house because you heard the neighbor might have mice. It’s a classic “throwing the baby out with the bathwater” response to risk. The related, but somewhat more tempered, approach is to simply use ™ alongside all trademarks, regardless of whether those marks are registered. The ™ is generally permitted, across the globe, to be used in connection with marks for which someone has any ownership claim, even if that claim is not based on a registration. This approach greatly diminishes the risk of incurring penalties for false marking, but doesn’t provide constructive notice of registration and therefore diminishes the potential remedy in the event of an infringement suit.
Of course, there are a plethora of approaches between these poles. Instead of having a website for each country, some companies have websites for each continent or region. This narrows the list of countries where a mark must be registered in order to use the ® without much worry. For example, a company could relatively safely use the ® alongside marks registered with the Office for Harmonization in the Internal Market (a.k.a., the European Trademark Office) on the European branch of its website, and adopt any other approach it sees fit for other regions. All of these approaches balance the benefits of maintaining a properly marked website (such as potentially increased damages and diminished risk for false marking) with the costs of doing so (such as domain registrations and legal oversight). As such, the optimal space for a particular company on this continuum depends on its resources, Internet presence and general tolerance for risk.
Still, I found another approach that lies outside this continuum. Recall that the primary goal of the symbols is to notify the public of a certain type of claim to a mark, and the symbols are just shorthand for the particular claims. This approach replaces the shorthand with a hyperlinked asterisk that directs a website’s visitors to a master list of the company’s trademark registrations. With statements like, “The ___ mark is registered in ____,” these pages notify visitors of the exact borders of a company’s trademark rights. This eliminates quite a bit of the liability related to false marking but does not clearly qualify a company for increased damages in every country. An asterisk with a link is not as clear notice as a simple ®, so those who adopt this approach may not be universally deemed to have provided infringers constructive notice, and therefore may not always increase their potential damages in the event of infringement. There is also the issue with eliminating ambiguities, which can benefit companies. As any poker player will tell, sometimes less is more.
As should be evident, global companies have adopted a variety of strategies for notifying the public of their trademark rights on the Internet. Some segregate their domains by country or region, and others abandon the endeavor altogether. Some companies even post the details of their entire trademark portfolios online. While the responses are varied, the considerations remain constant, and are not unlike those with print media: (1) the potential liability for false marking; (2) the benefits of having provided constructive notice in the event of infringement; (3) the costs of maintaining a compliant strategy; and (4) the general consequences each approach has on the overall business. Time to make the donuts®.
Shaun J. Bockert is an associate at Blank Rome and concentrates his practice on intellectual property and technology matters. He can be reached at firstname.lastname@example.org.
David M. Perry is a partner at the firm and concentrates his practice on intellectual property and related business issues confronting companies and individuals trading in a diverse array of industries. He can be reached at email@example.com.