Functionality Limitation
A trademark for trade dress allows protection for the unique design of objects such as water bottles, store layouts, or any number of commercial products. For example, a particular shape of a water bottle can be trademarked. However, a shape that substantially improves grip or otherwise enhances the usability of the bottle would likely run into trouble when it comes to registering a trademark for those design elements. This limitation is designed to protect against using the trademark system to limit competition by registering functional elements and then pursuing trademark rights against a competitor.
The rule of thumb for functionality is that it cannot protect a feature that is "essential to the use or purpose of the article or if it affects the cost or quality of the article." However, depending on the design or functionality, it may be eligible for patent or copyright protection.
Territorial Limitation
One of the characteristics of trademark law is that it is limited to the area of any given country (called "territoriality"). Transnational trademarking systems also exist, whereby several countries enter into a treaty that allows a single trademark to exist in multiple signatory countries, without the trademark owner having to apply in each country individually. For example, in the European Union, a Community Trademark registered with the Office for the Harmonization of the Internal Market applies Union-wide. Similarly, a trademark under the Madrid Protocol can give a trademark owner rights in over 92 countries and territories via a single application.
However, a trademark registered in the United States will only be enforceable in the United States. This limitation is even more pronounced when it comes to unregistered trademarks (often called common law marks), which usually can only be enforced locally, meaning at the state level. Only a registered USPTO trademark grants national trademark rights.
Fair Use Limitation
The fair use doctrine also applies to trademark law. In many cases it is a defense to claims of trademark infringement. Fair use allows use of someone else's trademark to refer to, or name, those specific trademarked goods or services. For example a car repair shop can say "We fix TOYOTA cars". This is called nominative fair use.
The other type of fair use is descriptive fair use, and it allows use of a trademark in an ordinary, descriptive manner to describe the product or service. For example, you can describe a dessert as "sweet and tart" without infringing on the SWEETART trademark.
Because many trademarks rely on words commonly used in everyday language, a trademark owner cannot enforce his rights if his trademark is legitimately used in a fair use context. Even if a trademark is arbitrary and fanciful, the owner may still not be able to enforce his or her rights if it is used in a manner that is nominative or descriptive.
Import Limitation
Goods are often sold in different countries, sometimes with different packaging and pricing. In the United States, a trademark owner is not able to block what's known as "parallel imports"—when someone imports goods without the consent of the trademark owner in that country. For example, let's say you own a trademark in the US and European Union, and you sell your product for less money in the European Union. If someone else buys your goods in the European Union, imports them to the US, and then resells them there for less money, you probably can't use trademark law to fight it. However, if the goods are being imported from a country where the goods are not trademarked, then the trademark owner may be able to block that import.
If you have more questions about the limits of trademarks, reach out to a Rocket Lawyer network attorney for affordable legal advice. Need a trademark for your business? Rocket Lawyer Trademark Services can help you with the entire process, start to finish.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
