Chicago Taxi Company's Ongoing Struggle to Maintain Trademark May Backfire.

CHICAGO, April 21, 2009 -- American Taxi Dispatch, Inc. filed a trademark infringement suit today against a competitor, extending the company's long litigious history of 34 years.

Chicago-based taxi service American Taxi Dispatch, Inc. (American Taxi) filed suit today in the U.S. District Court for the Northern District of Illinois against rival taxi company American Taxi Cabs, citing trademark infringement and unfair competition.

American Taxi began operations in the Chicagoland area in 1975 and was incorporated on March 1, 1977. Generally speaking, the first party to use a trademark has the superior claim of ownership. Notwithstanding its prolonged use the mark, American Taxi did not federally register the mark AMERICAN TAXI until February 14, 2006.

Typically descriptive marks such as AMERICAN TAXI do not qualify for federally registered status. The exception to this prohibition against conferring registered status to descriptive marks can be overcome by establishing prolonged, extensive use of a mark leading to acquired secondary meaning. Secondary meaning is established when the perceiver of a trademark associates the mark as an identifier of the source for goods/services which is above and beyond the literal meaning(s) of the mark's content.

American Taxi Dispatch, Inc.'s registration may come under attack by the defendant. A federal trademark registration can be cancelled if a competent court determines a mark is generic, descriptive, misleading, scandalous, obscene, or other legal grounds. A descriptive mark can defeat a challenge based on descriptiveness if the mark has been registered for five years and an application for incontestability is filed with the USPTO. Again, American Taxi Dispatch, Inc.'s registration is dated February 14, 2006 and is therefore vulnerable to attack.

The choice of such a descriptive trademark may be in part the reason for the many legal proceedings initiated by American Taxi Dispatch, Inc. Since 2006, American Taxi has initiated at least eight opposition proceedings with the United States Patent & Trademark Office (USPTO) to prevent other parties from registering trademarks containing "American" and "Taxi" such as AMERICAN METRO TAXI & LIMO CO and O'HARE AMERICAN TAXI & LIMOUSINE.

If American Taxi is successful, they could recover defendants' profits and any damages sustained by the plaintiff because AMERICAN TAXI is federally registered. In assessing damages the court may enter judgment for any sum above the amount found as actual damages, up to three times. When a court finds a defendant intentionally counterfeited a registered trademark, the court must, unless the court finds extenuating circumstances, enter judgment for three times such profits or damages, whichever is greater, together with a reasonable attorney’s fee unless the Plaintiff elects for statutory damages up to $1,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed.

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