NAFTA sec. 1711 trade secrets in North America

The North American Fair Trade Agreement is a treaty signed between Mexico, Canada, and America.  In section 1711 of NAFTA the countries reached an agreement about trade secrets.  The agreement goes like this:

• All member countries must provide legal means to prevent trade secrets from being disclosed, acquired, or used by someone other than the trade secret owner in a manner contrary to honest commercial practice, without the consent of the owner.
• All member countries agree that a trade secret is: 
• information that is secret;
• has actual or potential economic value;
• and the owner of the information has taken reasonable measures to assure the information's secrecy.
• All member countries can't limit the time a trade secret is protected for.
• All member countries can't make it unnecessarily difficult to license trade secrets, either by fees or procedures.
• All member countries agree that if their drug approval system requires disclosure of potential trade secrets that those trade secrets will be protected from disclosure by the member country. 

Importing trademarked goods and the gray market

Sometimes trademark owners sell their wares in other countries.  So, you might think that if you can go to the other country and get trademarked goods for cheap that it makes sense to have it imported back to the U.S. and to sell it for less than what it sells for in the U.S.  Unfortunately the Tariff Act of 1930 prohibits this sort of business.  Title 19 U.S.C. sec. 1526 is the section that outlaws this behavior and it says that it is unlawful to import into the U.S. any merchandise made in another country if it bears a trademark owned by a person or business that was created or organized in the U.S.; the trademark is registered by a person domiciled in the U.S.; and the registration is filed with the secretary of the treasury; unless you have the written consent of the owner of the trademark.  These goods are called gray market goods because in the country they were in, they were authorized goods with a valid non-counterfeit trademark on them.  However, when those goods are imported they become illegal.  If you get caught importing gray market goods then:

• first time, you get a fine for less than the value of the goods' American suggested retail price;
• any time after that, you get a fine for less than two times the value of the American suggested retail price;

The fine is at the discretion of the U.S. Customs services and it is in addition to any other criminal or civil penalty.  Also they seize your goods and you don't get them back.  Lastly they can shut your business down and stop you from selling these imported gray market goods. 

Beltronics USA, Inc v Midwest Inventory Distribution, LLC, 562 F3d 1067, 1069 (CA 10 2009)

This is a business story about authorized dealers of radar detectors that stripped the serial numbers off the detectors so that they could sell the detectors through back channels. The distributors were sued, and lost, for trademark infringement.

Beltronics made radar detectors and sold them to two authorized distributors.  Beltronics' distribution agreement said that those two distributors were the only ones who could distribute the product.  The two distributors stripped the serial numbers off the radar detectors and then sold them to other distributors.  The authorized distributors stripped the serial number off because they didn't want Beltronics to know that it was the authorized distributors who were selling the radar detectors to other distributors.  Beltronics found out and sued for trademark infringement.  The authorized dealers defended by saying that Beltronics lost its rights when it sold the detectors to the authorized distributors, this defense is called the first sale doctrine.  The court held that the first sale doctrine does not apply when the alleged infringer sells goods that are materially different than the goods sold by the trademark owner.  The court found that stripping serial numbers off detectors makes the detectors materially different.  The authorized distributors lost the trademark infringement suit.

So, if you're going to breach a distribution agreement with your supplier don't do it in a way that materially changes the goods that the supplier supplied you with;  Or, you can do whatever you want and just budget for a trademark infringement lawsuit.

15 U.S.C. sec. 1125(a)(1)

This statute has been used to protect trademarks.  It makes a civil cause of action for anybody who is likely to be damaged when:

• A person, business, or government entity;
• Uses a word, symbol, or device
• or uses lies to misrepresent where a good or service comes from or to describe goods or services;
• The use is made in connection with a good or service;
• The use is made in commerce;
• And that use is likely to cause confusion, mistake, or deceit as to connection to another person or another place of origin;
• or when the use is an advertisement that misrepresents the nature, characteristics, qualities, or geographic origin of the goods or services;

Note: When the person who is likely to be harmed wants to sue to protect their alleged trade dress, that person must first prove that their alleged trade dress is not functional.

15 U.S.C. sec. 1114 limitations on remedies for trademark infringement

People, the government, and corporations can be sued for money or enjoined (told to stop) when, without permission, they use someone else's trademark in business in a way that is likely to cause consumer confusion, consumer mistake, or deceive consumers.  The person using the trademark without permission is an infringer and the person who owns the mark is an owner.  The statutory limitations on who can be sued, and what they can be sued for, are covered in section 114 of title 15 of the U.S.C., they are:

• The infringer must knowingly use the other person's trademark for the owner to recover money.
• When the infringer is only printing the mark and they show that they are an "innocent infringer", the owner can only sue to stop the infringer from printing the mark in the future.
• There is no injunction for periodicals (newspapers, magazines, ezine) where stopping the printing would delay printing of the whole periodical.  This only applies to periodicals that have adopted an industry wide practice for printing and not some strange scheme they devised to allow them to take advantage of this limitation.
• A domain name registrar can only be sued to stop their business of registering domain names when: 
• they have not quickly given the court enough information for the court to establish that it has jurisdiction over the case; 
• changed the domain name registration during the case without the court's authorization;
• or willfully failed to do something the court told the registrar to do.
• A domain name registrar that does something in compliance with a court order or as part of a reasonable policy to prevent trademark infringement, can not be sued unless they do something from the list of things mentioned in the previous bullet point.
• A domain name registrar can only be sued for registering or maintaining a domain name if there was a bad faith intent to profit from the registration or maintenance of the domain name.
• If a domain name registrar is sued because of what they did to someone's domain name based on a material misrepresentation from another person that the domain name was infringing a trademark, then the person who made the material misrepresentation pays for any amount the registrar is sued for and the registrar's costs of defending the suit. 
• If a domain name owner's domain name is suspended, disabled, or transferred because of the domain name registrar's reasonable policy to avoid trademark infringement; then the domain name owner can sue to have the domain name reactivated or transfered back to them.
• Manufacturers or licensees/licensors of technology that makes part of a video imperceptible are not liable for trademark infringement as long as they make sure that the technology "provides a clear and conspicuous notice at the beginning of each performance" that says that the video is altered from the performance intended by the director or copyright holder of the video.
• The requirement that the technology provide clear and conspicuous notice of the alteration only applies to technology manufactured after October 24, 2005.
• This is just a safe harbor provision.  If the manufacturer doesn't comply with it, it doesn't mean that manufacturer is guilty of trademark infringement.  The manufacturer just can't use this clause as a defense.
• If a member of a private household makes a part of a video (that was authorized to be performed in, or transmitted, to their house) imperceptible so that they can view it later in their private home; then there is no trademark infringement.  As long as their is no fixed copy of the altered version of the video.
• If a person makes software that does what is described in the previous bullet, and the software is designed to be used at the direction of a member of a private household, then there is no trademark infringement.