California's Ship Smart Delivers Federal Lawsuit to New Jersey's Ship Smart.

SAN FRANCISCO, July 17, 2009 -- A bicoastal federal trademark lawsuit has erupted as California's Ship Smart, Inc. initiated legal proceedings today against New Jersey's Ship Smart Inc.

The complaint filed with the U.S. District Court for the Northern District of California accused the New Jersey company of trademark infringement, false designation of origin, unfair competition, unfair business practices under California law, and false advertising.

According to the complaint, the California company trading under the SHIP SMART trademark has been using the mark since June 9, 1999 in connection with its packing, shipping, moving, freight transportation and truck rental services.

The California incarnation federally registered the trademark SHIP SMART on August 1, 2007.

The primary purpose of trademark infringement laws is to prevent consumer confusion regarding the source of goods and services. The first party to use a trademark has the superior claim of ownership. as such, they may prohibit other parties from using a mark subsequently on connection with similar goods or services. The marks do no have to be identical, but merely similar enough that they are likely to cause confusion. In this case, the marks are obviously the same.

The complaint does not contain an allegation by the California company that it used the trademark SHIP SMART before the New Jersey company did. If the New Jersey company was the first party to use the trademark at issue, they are the rightful owner and have an absolute defense to the lawsuit.

As part of the federal trademark registration process, the United States Patent & Trademark Office (USPTO) publishes the trademarks seeking registered status in a regularly published gazette to satisfy notice and due process requirements under the U.S. Constitution. The publication period of 30 days is meant to give interested parties an opportunity to oppose the registration of a trademark for good cause. After a mark has been published for opposition and registered status is conferred, the public is deemed to have knowledge that a trademark is in use. In legal terms, this implied knowledge is referred to as "constructive notice." As a consequence, a party using a confusingly similar trademark after the owner's date of first use can not plead ignorance of the owner's prior use as a defense.

Another defense that could be raised by the New Jersey company is that the trademark SHIP SMART is merely descriptive and therefore not entitled to protection unless a showing of secondary meaning can be proven. Descriptive trademarks can be protected in a court of law but typically do not qualify for federal registration unless the applicant can demonstrate continuous use for at least five years during which time the mark achieved secondary meaning within the consuming public. Secondary meaning is established when a mark or identifying devise become associated with the source for goods or services above and beyond the literal meaning of the mark. Even when a descriptive mark has been registered, the registration may be challenged and cancelled by an interested party in the first five years. At the end of the initial five year period, the owner of a registration may obtain incontestable status which precluded cancellation for descriptiveness. Incontestable status does not preclude cancellation for genericness.

Pursuant to the Lanham Act, the rightful owner of SHIP SMART could recover the defendants' profits and any damages sustained by the plaintiff if infringement is found.

In assessing damages of a federally registered trademark, 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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