Trademark Infringement Explained: Key Legal Tests

The $1.4 Billion Counterfeiting Problem

U.S. Customs and Border Protection seized counterfeit and pirated goods worth $1.4 billion in fiscal year 2023 — a figure that represents only a fraction of what actually enters commerce. Trademark infringement imposes costs far beyond brand owners: it funds criminal networks, exposes consumers to unsafe products, and undermines the competitive marketplace that trademarks are designed to protect. Understanding how infringement is assessed requires examining several distinct legal doctrines that courts apply every day.

The Eight Polaroid Factors

Federal courts in the Second Circuit apply the Polaroid Corp. v. Polarad Electronics Corp. (1961) framework to determine whether one mark creates a "likelihood of confusion" with another. The eight factors are not a checklist — courts weigh them holistically.

The Ninth Circuit uses a similar eight-factor test derived from AMF Inc. v. Sleekcraft Boats (1979). Both circuits agree that no single factor is determinative, though actual confusion evidence is typically given significant weight.

Dilution: Protection Beyond Confusion

The Federal Trademark Dilution Act of 1995, strengthened by the Trademark Dilution Revision Act of 2006, protects "famous" marks from dilution even when there is no likelihood of confusion and no competitive relationship between the parties. A mark qualifies as famous if it is "widely recognized by the general consuming public" — a high threshold that brands like COCA-COLA, GOOGLE, and TIFFANY meet but most trademarks do not.

Two forms of dilution exist:

• Blurring: The famous mark's distinctiveness is weakened by association with dissimilar goods (e.g., KODAK laundry detergent would blur the KODAK photography mark)
• Tarnishment: The mark is associated with inferior, offensive, or unseemly products in ways that damage its reputation

In Tiffany Inc. v. eBay Inc. (2d Cir. 2010), Tiffany sued eBay for allowing counterfeit Tiffany jewelry listings. The court held eBay liable only where it had specific knowledge of individual infringing listings and failed to act — not for generalized awareness that counterfeits existed on the platform. This ruling significantly shaped online marketplace liability.

UDRP Domain Disputes

The Uniform Domain-Name Dispute-Resolution Policy (UDRP), adopted by ICANN in 1999, provides a faster and cheaper alternative to federal litigation for domain name disputes. A trademark owner filing a UDRP complaint must prove three elements:

• The domain name is identical or confusingly similar to a mark in which the complainant has rights
• The registrant has no rights or legitimate interests in the domain
• The domain was registered and is being used in bad faith

Bad faith indicators include registering the domain primarily to sell it to the trademark owner, using it to attract users for commercial gain by creating confusion, and a pattern of registering well-known marks. Cybersquatting — registering famous names speculatively — can also trigger the Anticybersquatting Consumer Protection Act (ACPA) in U.S. federal court, which allows damages of $1,000 to $100,000 per domain name.

Counterfeiting vs. Infringement

Counterfeiting is a subset of trademark infringement involving the use of a mark that is identical or substantially indistinguishable from a registered mark on the same category of goods. Courts treat it more severely. Statutory damages for counterfeiting under 15 U.S.C. § 1117 range from $1,000 to $200,000 per counterfeit mark per type of goods — and up to $2,000,000 per mark if the infringement was willful. Criminal counterfeiting penalties under 18 U.S.C. § 2320 include fines up to $2 million and imprisonment up to 10 years for a first offense.

Defenses and Fair Use

Defendants have several recognized defenses. Descriptive fair use permits a party to use another's registered mark in a descriptive, non-trademark sense (e.g., using "sharp" to describe a knife even if SHARP is a registered electronics brand). Nominative fair use applies when a defendant refers to the plaintiff's own goods or services by the trademark — as when a mechanic advertises BMW repair using the BMW mark. Parody is protected under the First Amendment, though purely commercial parodies receive narrower protection than artistic commentary.

This article is for informational purposes only and does not constitute legal advice.