Written by: Susan Neuberger Weller

The Internet Corporation for Assigned Names and Numbers (“ICANN”) is the organization that oversees domain names worldwide.  It recently began accepting new applications for expanding the number of generic top-level domains (“gTLDs”) on the Internet. The most popular gTLDs until now have included .com, .info, .org, and .net. With the approval of applications for new gTLDs will come an unlimited number of new opportunities on the Internet for entrepreneurs of all types, including trademark infringers. Thus, trademark owners must make some decisons on how to address this new threat. One possibility is the new Trademark Clearinghouse.

 ICANN created the Trademark Clearinghouse (“Clearinghouse”),  which went live on March 26, 2013, in an effort to help trademark owners protect their brands in the midst of this expansion of available gTLDs.  Trademark owners who record their marks with the Clearinghouse under the relevant procedures are entitled to: (1) first priority in registering their recorded marks as second-level domain names under the new gTLDs during the “sunrise” period (which will vary by gTLD but will be at least 30 days before the general public would be permitted to do so), and (2)  receipt of notification when a domain has been registered under any new gTLD that matches the trademark owner’s recorded mark. The ICANN filing fee to record a trademark in the Clearinghouse is $150 (US) for one year, $435 for three years, and $725 for five years.

There is no deadline for recording a trademark with the Clearinghouse, but there are advantages to doing so during the “sunrise” periods. As stated above, recordation during this period provides trademark holders with advanced opportunities to obtain a second-level domain name under one of the new gTLDs before registration is open to the general public, e.g., twinkies.food. In addition, during the “trademark claims period,” which will run for at least 90 days after the initial operating period for general domain name registration under a new gTLD, those seeking registration of a domain name that matches a recorded trademark will be notified of the existence of the recorded mark. There is no mechanism in place which will automatically prevent the registration of a domain name matching a recorded trademark. Thus, although someone seeking to register a domain name which matches a recorded trademark may be notified about the existence of the recorded mark, that someone may still register that domain. Should this happen, the owner of the recorded trademark will be notified of the registration and will then have to make a unilateral decision on what action to take, if any, against the registered domain.

For those who have recorded their marks at the Clearinghouse, ICANN provides two global rights protection mechanisms for dealing with allegedly improper domain registrations: (1) the Uniform Domain Name Dispute Resolution Policy, and (2)  Uniform Rapid Suspension. Each mechanism operates in a slightly different manner.

Since neither recordation with the Clearinghouse nor any other ICANN procedure actually stops registration of a domain name which matches a recorded trademark, reaction by trademark owners to the Clearinghouse has been mixed. Accordingly, each trademark owner will have to engage in its own cost/benefit analysis and weigh the pros and cons of this new system in deciding whether to record any, all, or some of its trademarks.

There have been many attempts over the last few years to address online copyright infringement.  The most recent effort is the Copyright Alert System (“CAS”), which was rolled out in February 2013 as a system created to educate and alert the public about the dangers and harm caused by copyright infringement. The CAS is the first to outline pro-active, temperate measures to try to remedy one cause of the problem: the perceived anonymity of infringers operating through peer-to-peer websites.  The CAS gives infringers the opportunity to be notified of and to discontinue their wrongful actions before costly litigation ensues.

The CAS  is not a “law” but a voluntary effort by a private consortium (the Center for Copyright Information) comprised of a variety of large copyright owners (e.g., the Motion Picture Association of America [MPAA], the Recording Industry Association of America [RIAA] and Disney, among others) and internet service providers (e.g., cable companies such as Verizon, Cablevision, and Comcast or “ISPs”).  Under the CAS, when content owners discover infringing  content posted on websites alleged to knowing permit copyrighted content to be infringed (such as BitTorrent), they will send the suspected infringers a series of escalating “alerts” notifying them that they are accused of infringing copyright protected content.  The CAS does not involve litigation or demands for damages. The hope is that through this process, users will realize that infringement is not taking place anonymously on peer-to-peer file sharing websites, that content owners are aware of the infringement, and that there can be serious and expensive legal repercussions if the infringement does not cease.

Under the CAS, content owners communicate with alleged infringers anonymously through a series of “alerts” sent to the users by their ISP after that user is identified by a content owner as having participated in copyright infringement.  The ISPs will not monitor for copyright infringement. Rather, the content owners will monitor peer-to-peer websites, such as BitTorrent, alleged to knowing  allow users to traffic in infringing material, and will send an alert to an ISP that an infringement is taking place, identifying the user by their IP address. The ISP will then send to the registered users of that IP address (without revealing to the content owner any names, addresses or other contact information) a series of alerts stating that that IP address is suspected of copyright infringement and outlining possible sanctions for future infringements.

How will the “alert” system work? The series of six possible escalating “alerts” will be implemented individually by each ISP under its own process. Generally, the system will work as follows:

• First and Second Alerts – These “information” alerts notify the user that an infringement has been identified by a content owner associated with that IP address and force the user to acknowledge receipt of the notice.  For example, a message may be sent via pop-up to the user’s browser requiring a click through acknowledgement, or a user may have to log into their ISP account to read and acknowledge a message.
• Third and Fourth Alerts – These “warning” alerts will use more urgent language.  Some ISPs may require the primary account holder (rather than just authorized users of the account) to log in to view a message.
• Fifth and Sixth Alerts – Fourteen days after each of these last two urgent alerts have been sent, an ISP may take “mitigation actions.” During the fourteen day window, the accused user may file an appeal of these alerts, as discussed below.  “Mitigation actions” could include Verizon, for example,  throttling data speeds down to dial-up speeds for a few days,  Comcast posting a persistent pop-up in the user’s browser requiring that user to contact Comcast for “further education and information about copyright infringement” before it will clear the alert from the user’s browser, or  Cablevision disabling internet access for 24 hours.

How do you “appeal” an alert or argue you didn’t do it?  Several of the ISPs, such as Cablevision, Verizon and Comcast, have already published their appeal processes, which are the same.  They provide for an anonymous appeal (since, forcing the user to identify themselves would have a chilling effect) to the American Arbitration Association if an appeal is filed within fourteen days of the user receiving either their fifth or sixth “alert.” No appeal can be filed before then. The user must pay a fee of $35 (which will be refunded if the user wins the appeal), which may be reduced or waived if the user can prove financial hardship.

Generally, there are six grounds upon which a user can argue that the fifth and sixth “alerts”  (and any mitigation measures) were unjustified.

1. The reproduction of the copyrighted work and distribution of it through the file sharing website is a “fair use” as interpreted by copyright law and the courts.
2. The IP address and account were incorrectly identified as one through which acts of alleged copyright infringement have occurred.
3. The allegedly infringed copyrighted work was published prior to 1923 and is in the public domain.
4. The alleged infringement was committed through the unauthorized use of the IP address and account and the ISP customer was unaware of it and could not reasonably have prevented it.
5. The sharing of the copyrighted material was authorized by its copyright owner.
6. The allegedly infringing file/content is not primarily the allegedly infringed copyrighted work.

What happens after six alerts if there is no appeal and the ISP has taken all “mitigation actions”?  Since the CCI’s stated goal  is to educate the public, no further alerts will be sent and no further actions will likely be taken via the CAS process.  However, just because an ISP may not take any further action under the CAS does not mean that the content owner itself will not take action (e.g., file a copyright infringement lawsuit).

It remains to be seen however how this program will be received and whether content owners will find it to be an effective strategy. We will continue to provide updates on developments under this system as it is implemented.

Five steps to protect a marks’ value

Trademark owners have a duty to police their mark.  This applies to all types of marks – brand names, slogans, color, product shapes, or even a smell.  The cost of dropping the ball on this duty can range from a bar on future enforcement of your rights against a particular company to a complete loss of all trademark rights.  As a practical business reality, the value of marks that are not policed and their associated goodwill are always in danger.

This duty includes policing (1) for unauthorized uses of a mark, (2) for uses of confusingly similar marks, and (3) uses by approved trademark licensees.  This blog post covers the first two types.

So how do you police?  Here are five good steps:

First, decide where you are going to police.  This will depend on where you currently own rights and what your expansion plans may be.  Trademarks are territorial – federally registered marks are effective nationwide, while unregistered, common law rights are effective in the geographic area of actual use (and also the natural zone of expansion).  Trademark rights also exist on a country-by-country basis, so rights in the US have no effect outside the US and vice versa.

Second, develop a proactive system to learn of misuses.  Trademark problems are often easier to resolve the earlier they are raised, so diligence is key.  Some suggested action plans include:  (1) searching  the web periodically for improper uses, (2) searching the USPTO’s online TESS database of federal trademark applications and registrations, (3) setting  up a Google Alert for your trademark, (4) setting up an online trademark theft reporting process, a very prominent example being CrossFit’s (iptheft.crossfit.com), (5)  following up on customer complaints,  and (6) using  a professional watching service.

Third, evaluate the substance of any potentially problematic uses you discover to decide if any action is necessary.  For example, is the third party use on or for goods and/or services similar to yours? Is the area of geographic use an issue?  Is the use of no legal concern because it is a permitted fair use?

Fourth, if the use is a concern and may infringe your rights in your mark, action should be taken.  A typical first step is sending a cease and desist letter to the infringer.  If a federal application is pending, you may be able to oppose the application at  the USPTO.  For uses on the web, the domain name registrar may be willing to remove improper or infringing content even if the owner or user refuses to.  Improper use of a mark in a domain name can often be resolved through streamlined UDRP proceedings.  Be cautious, however,  about sending letters concerning the unauthorized or infringing use to third parties, such as the infringing company’s buyers, or using internet forums or other public venues to blast the alleged infringer, since you could  end up on the receiving end of an interference lawsuit.

Fifth, if problematic uses remain unresolved despite efforts to address them, formal legal action may be necessary.  Often simply filing of a lawsuit will force a resolution, and the fact is that most cases do not proceed all the way to trial.  Business judgments have to be made on which cases to pursue. Some courts will excuse delaying litigation against a known infringer until the use poses a significant danger to the mark (the concept of “progressive encroachment” is discussed by Bloomberg BNA® here), while others will bar delayed enforcement if you wait too long to file suit.

Policing your trademark is not an option nor is it a luxury. It is an affirmative, legal duty. Such efforts will help to build a stronger, reputable brand, will avoid loss of trademark rights, and will minimize the risk of an infringer operating with  impunity based on delayed enforcement efforts.

Rapper Dr. Dre and the company he co-founded, Beats Electronics, LLC, are on the offensive at the US Trademark Trial and Appeal Board challenging a multitude of third-party applications for marks which consist of or contain the word “Beat”. The company owns a number of trademark registrations for use of its various BEATS marks on headphones, speakers, headsets, and other related electronic products and has applications pending for future use on clothing and other items. As reported in the WSJ Law Blog last week, the targets of this campaign are mix of smaller, little-known companies as well as big players such as Sony.

The company claims a “likelihood of confusion” between its alleged rights in its various BEATS marks and the various “BEAT” marks applied for by third parties. It also claims for “dilution” of its rights by the proposed uses of these various marks. The goods and which are the subject of some of the opposed applications include clothing, software, electronic greeting cards, music production services, audio and video recordings, digital music, CDs, DVDs, electronic greeting cards, and the like.

In a “likely confusion” analysis, the issue is whether consumers are likely to confuse the source of the goods and/or services provided by two different parties under particular marks, assuming them to come from the same source even if that source is unknown. Factors that are used in such an analysis to come to a conclusion include the civil similarity of the trade marks, the similarity of the goods and’s/or services provided under each, the similarity of the target customers, as well as the similarity of marketing methods and venues and channels of trade for the respective product/services, the notoriety of fame of the respective marks, the strength and uniqueness of the marks, whether any actual confusion has occurred, and such other factors as may be relevant the particular situation. Determination of this issue can be very fact specific and is decided on a case-by-case basis. Sony, for example, has applied to register the mark “BEATS” for computer games, toy figures, and online gaming services, none of which are incorporated in any of the registrations or applications owned by Beats Electronics.  Does that mean that Dr. Dre’s company may be overreaching a bit in arguing confusing similarity with Sony’s products? Since the parties are currently engaged in ongoing discovery in the pending administrative litigation, the answer to that question may not be available for some time. Whatever the answer, the company’s strategy may be successful if some of the smaller companies simply back off rather than face expensive administrative litigation against a well-funded company, regardless of the merits of the “likely confusion” claims.

The second claim asserted by Dr.  Dre’s company is a dilution claim. Although noted in the papers filed at the TTAB, this claim is not expounded upon in the pleadings. For a dilution claim to succeed it is not necessary to prove competition, likely confusion, or any overlap in the goods and services between the parties issue. However, in order for a dilution claim to succeed, the proponent must own a “famous” and” distinctive” mark. In most cases, it takes a fairly lengthy amount of time, sales, marketing, and recognition to become a “famous” mark. We all know unquestionably famous marks when we see them, such as MICROSOFT, FACEBOOK, NIKE and COKE. Dr. Dre’s BEATS trademark has, according to its Trademark Office filings, only been in use for a little under five years on headphones and for less time than that on other of the products it sells. Whether the company can prove that in this short period of time its  ”BEATS” mark has become famous enough to successfully assert a claim for dilution remains to be seen.

Until such time as a definitive decision is issued by the TTAB or a civil court, Dr. Dre’s “BEATS” challenges, presumably, will go on.

On December 17, in Washington Shoe Co. v. A-Z Sporting Goods, Inc., the Ninth Circuit expanded the exercise by Federal District Courts of personal jurisdiction over out-of-jurisdiction defendants in federal copyright cases. Building on the Supreme Court’s seminal 1945 decision in Int’l Shoe Co. v. Washington, the court explained how an Arkansas shoe retailer that had never done business in the state of Washington could nonetheless be subject to personal jurisdiction in that state.

To read the full alert please click here.

On November 2, 2012, a federal jury in the Central District of California awarded Mixed Chicks LLC, a beauty supply company for mixed-race women, $839,535 in actual damages and $7,275,000 in punitive damages for willfully infringing the MIXED CHICKS® trademark and trade dress with its MIXED SILK line of products. Mixed Chicks LLC, v. Sally Beauty Supply LLC, et al., SACV11-00452 AG (FMOx) (C.D.C.A. 2012). On November 29, the infringer Sally Beauty Supply LLC agreed to a settlement of $8.5 million, which is larger than the actual jury award. It did so in order to avoid further hearings on and awards to Mixed Chick of its’ attorneys’ fees and of Sally Beauty’s profits as a result of its infringing activity.

Mixed Chicks LLC, a relatively small company founded in 2004 with approximately $5 million in annual revenue and approximately 15 full-time staff members, filed suit in March 2011 against Sally Beauty Supply LLC and related companies for federal and state trademark infringement, trade dress infringement, false designation of origin, and unfair competition claiming that Sally Beauty’s line of MIXED SILK hair care products infringed both the MIXED CHICKS ® trademark as well as the overall appearance of that line of products. The Complaint also claimed that Sally had “programmed or caused the search engine on the Sally Beauty website to operate in [a] manner to cause confusion or mistake, or to deceive as to the origin of the Mixed Silk hair care products with the intent to benefit from Mixed Chicks’ reputation and goodwill,” Apparently, when consumers searched “mixed chicks” on the Sally Beauty website only MIXED SILK products results would appear. Mixed Chicks claimed that the wrongful activity was willful and with the intent to benefit from the goodwill and reputation in the mixed race hair care product market that Mixed Chicks had developed through their specialized high-quality hair care products. 

Sally Beauty, which began with one store in 1964, is the world’s largest retailer of professional beauty supplies. It owns and operates more than 2700 Sally Beauty Supply stores worldwide, including every state in the United States, and in Puerto Rico, Canada, Mexico, Germany, the United Kingdom, Ireland, Belgium, France, and Spain.   It also sells its products online at www.sallybeauty.com. It reported net sales in 4Q12 of $883 million and  FY2012 of over $3.5 billion.

Although the MIXED SILK product line is no longer sold and cannot be found on the Sally Beauty website, information about both the MIXED SILK and MIXED CHICKS lines of products and a view of some of their respective packaging can be found here .

The decision to proceed with a full jury trial in this case could not have been easy for Mixed Chicks given the size and reputation of its formidable opponent. However, Goliath does not always win, particularly if the facts demonstrate efforts to undermine and injure a competitor through illegal and bad-faith conduct. Thus, if you are a David, don’t shy away from seeking redress for clear wrongs against your company, its brands, its reputation, and its goodwill. If the facts are on your side, you should make every effort to ensure that your assets are properly protected from a competitor’s overzealous reach.

Ever since the US Supreme Court in MedImmune, Inc. v. Genetech, Inc., 549 U.S. 118, 127 S, Ct, 764, 166 L. Ed.604 (2007)  threw out the “reasonable apprehension” test as defining the grounds for bringing a declaratory judgment action, courts have considered a wide variety of factual circumstances in deciding which meet the Court’s redefinition of “controversy.”

The Declaratory Judgment act provides that “[i]n a case of actual controversy within its jurisdiction…any court of the United States…may declare the rights and other legal relations of any interested party seeking such a declaration, whether or not further relief is or could be sought.” [28 U.S.C. 2201(a)] In MedImmune, the Court noted that it had explained in prior opinions that the “case of actual controversy” language in the Act refers to the US Constitution’s Article III’s case-or-controversy requirement,  and that a “controversy” under the Declaratory Judgment Act did not require any greater showing than that required under Article III. The Court clarified that declaratory judgment jurisdiction required disputes to be ‘“definite and concrete, touching the legal relations of the parties having adverse legal interests’; and that it be ‘real and substantial’ and ‘admit of specific relief through a decree of a conclusive character, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts.’” 127 S. Ct. at 771. Or, as put another way, “[t]he question in each case is whether the facts alleged, under all circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.” Id. Although this standard test may sound relatively straightforward, it is not always easy in its application, as the floral delivery company 1-800-Flowers.com Inc. recently discovered.

In 1-800-Flowers.com Inc. v. Edible Arrangements, LLC, 12 cv 1483 (DRH) (ARL) (E.D.N. Y. November 28, 2012), the court granted Edible Arrangements Motion to Dismiss the Declaratory Judgment Complaint of 1-800-Flowers for failure to meet the “case of actual controversy” requirement of the Declaratory Judgment Act. This case involved sets of trademarks owned by each party which were being used in connection with the marketing selling and delivering of various types of fresh cut fruit arrangements. 1-800-Flowers had filed trademark applications with the US Trademark Office to register several versions of its marks, and upon publication, Edible Arrangements filed notices of opposition against all of those applications. It contended that it would be damaged by the “use and registration” of the opposed marks and that there was a “likelihood of confusion” between each party’s respective sets of marks.

Subsequent to the filing of the oppositions, counsel for Plaintiff 1-800-Flowers spoke by phone with counsel for Defendant Edible Arrangements regarding the pending opposition proceedings. As set forth in the court’s Memorandum and Order, Plaintiff’s counsel’s evidentiary Declaration stated that he had asked during that telephone conversation “whether there was an issue respecting the[] Applications that might be rectified by Plaintiff making some change in the design element of “the opposed marks, and that Defendant’s counsel indicated that “there was no such change acceptable to Defendant.” Plaintiff’s counsel also stated in his Declaration that opposing counsel indicated that the “nature of Defendant’s objection” was Plaintiff’s “using the marks,” stating that opposing counsel made “clear that Defendant not only objected to Plaintiff’s registration of its[] marks, but also to Plaintiff’s use of the marks.” He further stated that Defendant’s counsel made no suggestion that her client’s objection to the use of the marks could be addressed through 1-800 Flowers’ “abandoning its registration effort,” and  that she “did not link the objection to registration or qualify the objection in any way.”

The Declaration of Defendant’s counsel differed slightly and contended that her client “was concerned regarding 1-800-Flowers’ attempts to register the [marks]” and that her client “did not want Plaintiff to use [the words in the marks].” Defendant’s counsel also contended that her “statement regarding use was linked to the issues regarding registration of the Applications for the opposed marks and was made in the context of a discussion regarding the [O]ppositions.”

It is generally well settled law that a dispute before the US Trademark Trial and Appeal Board over registration of a mark is not by itself sufficient to establish the “adversity” necessary to sustain a declaratory judgment action. The court in 1-800-Flowers recognized this as the law of the Second Circuit, and held that the following language in a TTAB Opposition pleading, without more, did not create an “actual controversy” between the parties sufficient to allow the declaratory judgment action:

Opposer will be damaged by the use and registration of [the mark] by

Applicant for Applicant’s Goods and Services because persons

 in the relevant channel of trade and the public viewing Applicant’s

mark in its entirety…will mistakenly assume that Applicant’s Goods and

Services are associated, endorsed by, affiliated with, or in some other way

related to or sponsored by Opposer, to the detriment of Opposer.

As such Applicant’s mark is not entitled to registration.

Plaintiff argued that the substance of the telephone conversations between Plaintiff’s and Defendant’s respective counsel added the additional facts necessary to establish a “case of controversy.” However, the court factually distinguished all of the cases upon which Plaintiff’s counsel relied in making this argument, finding that the telephone conversations between counsel did not amount to a “threat of litigation”, did not evidence “the existence of any ‘definite and concrete’ dispute between the parties,” and did not include any verbal exchanges “steeped in the language of trademark infringement.”

So, where does that leave the issue? Well, based upon the case law to date in trademark declaratory judgment actions, it seems that simple objections to use and/or registration of a mark without any additional type of “immediate” and “real” justiciable controversy, asserted claim or threatened litigation beyond administrative opposition proceedings do not meet the threshold requirements for a “case of controversy” under the Declaratory Judgment Act. Accordingly, those involved in initial or early-stage “disputes” regarding trademarks should tread carefully before considering a run to court for declaratory relief.

]]> http://www.copyrighttrademarkmatters.com/2012/12/05/how-do-you-or-dont-you-state-a-case-for-a-declaratory-judgment-in-a-trademark-dispute/feed/ 0 http://www.copyrighttrademarkmatters.com/2012/12/04/some-companies-must-do-more-to-protect-brand-identity/ http://www.copyrighttrademarkmatters.com/2012/12/04/some-companies-must-do-more-to-protect-brand-identity/#comments Tue, 04 Dec 2012 22:05:27 +0000 Geri Haight http://www.copyrighttrademarkmatters.com/?p=1221 My colleague Susan Weller recently authored an article for Law360 on protecting brand identity.

You can view the article here: Some Companies Must Do More To Protect Brand Identity

As we reported  previously, Lululemon, an exercise apparel company, filed suit against Calvin Klein and its supplier G-III Apparel Group for infringement of three Lululemon design patents for yoga pants. On November 20, 2012, Lululemon filed a notice of voluntary dismissal in the Delaware proceeding based upon a settlement that would dismiss the suit with prejudice. The terms of the settlement are confidential, according to a Lululemon, which released a statement asserting that “Lululemon values its products and related IP rights and takes the necessary steps to protect its assets when we see attempts to mirror our products.” The lawsuit was somewhat unique in that it involved a designer seeking to assert IP protection in articles of clothing through patent rights.

On October 1, 2012, the Federal Trade Commission issued its revised Guides for the Use of Environmental Marketing Claims, known as the “Green Guides.” The purpose of the Guides is to help marketers avoid making environmental marketing claims that may be perceived as deceptive or unfair under Section 5 of the FTC Act. The Guides do not confer any rights on any person and they do not bind the FTC or the public. The FTC does have the right to take action under the FTC Act if an environmental claim is made that is inconsistent with the Guides. They do not preempt federal, state, or local laws, and compliance with those laws does not preclude an action by the FTC. As stated therein, the Guides apply to “claims about the environmental attributes of a product, package, or service in connection with the marketing, offering for sale, or sale of such item or service to individuals… and also apply to business-to-business transactions.” The “claims” include those made in labeling, advertising, promotional materials, and all other forms of marketing in any medium, whether asserted directly or by implication, by words, symbols, logos, depictions, product brand names, or any other means.

The Guides address general and more specific and substantive types of claims in the following categories:

• General Environmental Benefit Claims
• Carbon Offset Claims
• Certification and Seals of Approval Claims
• Compostable Claims
• Degradable Claims
• Free-Of Claims
• Non-Toxic Claims
• Ozone-Safe and Ozone-Friendly Claims
• Recyclable Claims
• Recycled Content Claims
• Refillable Claims-Renewable Energy Claims
• Renewable Materials Claims
• Source Reduction Claims

This article will focus specifically on the Certification and Seal of Approval claims.

Section 260.6 of the Guides makes it “deceptive” to misrepresent “directly or by implication, that a product, package, or service has been endorsed or certified by an independent third-party.” In the Guides, the FTC discusses three basic categories of certification: (1) self-certification, (2) membership organization certification, and (3) independent third-party certification.

The first type–self-certification–occurs when a marketer/seller uses a seal of approval, logo, or certification mark that is not backed by an independent, third-party evaluation. The FTC considers certifications of this type likely to be deceptive since consumers generally assume that certifications are not self-awarded. The FTC advises that very clear and prominent language be used in connection with such certifications to ensure the public knows that such a certification was created and awarded by the user of the certification to itself.

The second type of certification–membership organization certification–is one used by members of a membership organization based usually only upon payment of dues and not any type of testing or evaluation. Again, the FTC advises that in order to avoid a finding of deceptiveness, use of these types of “certifications” should be accompanied by clear language indicating that there has been no evaluation of the products on or services with which the certification is used.

The third type of certification–third-party certification–is generally the type for which certification marks are registered at the US Trademark Office. Under US trademark law, a “certification mark is any word, name, symbol, or device, or any combination thereof, which is used by someone other than the owner of the mark to certify “regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of goods or services or that the work or labor on the goods or services was performed by members of a union or other organization.” 15 USC 1127. The purpose of such a certification mark is to inform purchasers that the goods or services certified possess certain characteristics or meet certain qualifications or standards established by someone other than the seller. The message to be conveyed by a certification mark is that the goods or services certified have been examined, tested, inspected or otherwise tracked by an independent party and by methods that have been established by the certifier/owner of the mark The owner of the certification mark must exercise control over the use of its mark, as is the case with all other types of marks, and must also state that it does not itself use the mark. Well known certification marks include the GOOD HOUSEKEEPING® seal of approval, the UL CERTIFIED® mark, the BETTER BUSINESS BUREAU® endorsement, as well as the use of regional certification marks such as ROQUEFORT®.

The FTC has made clear that a marketer must be able to substantiate all the claims which are reasonably communicated by a “certification,” and that an environmental certification or seal of approval must convey the basis for the certification or seal either through the name/mark or some other means. The use of “clear and prominent qualifying language” is recommended so that the certification or seal avoids any deception and refers only to the specific and limited benefits of the certification or seal.