Once a trademark owner determines that the trademark is being used by another party without authorization, it is necessary to consider action against such use. Depending upon the jurisdiction, such action may take the form of infringement proceedings, an action for unfair competition, or, in British law countries, an action for passing off, which is a type of unfair competition. Although books have been written on the conduct of trademark infringement and anti-counterfeiting proceedings, three primary issues in the music area merit attention, namely, the enforcement of rights against parties whose identity may not be known in advance, the enforcement of rights outside the civil court system, and the enforcement of rights in the absence of redress for trademark infringement per se.

The counterfeiting of musical recordings is the music industry’s chief intellectual property problem, and the unauthorized dissemination of recordings via digital media is certainly the latest concern. Recent figures from the Recording Industry Association of America (RIAA) concerning anti-piracy statistics indicate that while cassette piracy may be on the wane, digital format piracy is on the increase. This is not just an “American” problem, but one of global magnitude. Many may question the relevance of trademark laws in connection with this problem when it would appear to belong in the purview of a different intellectual property discipline, namely, copyright. The relevance is in the practical effectiveness of copyright laws, particularly in countries outside of the United States.

For many years the intellectual property bar always complained that remedies for copyright infringement in countries outside of the United States were often ineffective at best and non-existent at worst. Although this situation has relatively recently started to improve in many developed countries, the status quo continues in many countries where counterfeiting seems to be a chief source of the gross national product. Therefore, since trademark laws have historically provided a more effective means of enforcement, trademark laws became increasingly relied upon to combat counterfeiting.

1. Lanham Act

2. Trademark Counterfeiting Act of 1984

1. Unfair Competition

In the United States, Section 526 of the Tariff Act of 1930 allows trademark registrants to deposit their federal trademark registrations with the Customs Service, who will conduct spot checks of imported goods to make sure that the imported goods bearing deposited trademarks are authorized. If infringing products are detected, they will be seized and the trademark owners will be notified. The infringers may be liable for injunctive and monetary relief. However, if the offending marks are removed, the goods may then be imported, or may be reexported to another country if they are not removed.

The Tariff Act also provides special seizure and forfeiture penalties for imported products that bear a counterfeit mark, as defined in the Lanham Act. Such goods are automatically seized and forfeited unless the trademark owner, when notified, consents to their import. In contrast to infringing goods, counterfeit goods may not be released simply by removing the offending mark or by diversion to another country.

Criminal sanctions including fines and imprisonment are also available under the Counterfeit Label Act against anyone who “knowingly traffics in a counterfeit label affixed ... to a phonorecord or ... other audiovisual work.” [16] The definition of a counterfeit label covers not only copies of genuine labels but also the use of simulated genuine labels.

Although most foreign countries have trademark laws that provide for injunctive relief and monetary damages in the case of trademark infringement, such laws are usually not as far-reaching as those in the United States.

The rights accorded to a trademark registration may be far narrower than in the United States. Whereas some countries will consider two marks to be similar, other countries viewing the identical marks will regard the marks as entirely distinguishable. Countries vary widely on the standards used to determine similarity of goods and classes. Whereas some countries consider merely the goods of interest to the parties, other countries will focus on the classes in which the marks are registered in determining whether confusion is possible. A small number of countries who use the International Classification system have even adopted a sub-classification system which governs issues of similarity. There are even certain countries that do not recognize similarities between a trademark registered for certain goods and a trademark registered for corresponding services. For example, a trademark registered for “recordings” and the same trademark registered for “record production services” may not be considered to be confusingly similar. Ultimately, decisions as to confusing similarity are subjective decisions that are made by Trademark Office personnel, courts and appellate tribunals and it is vital to have counsel that has sufficient experience and sensitivity to understand in advance how each case is likely to be decided. One must also be sensitive to the home field advantage, namely a foreign company taking action against a local company in some jurisdictions will often be at a disadvantage as a result of xenophobia and preferences granted to nationals.

Certain countries, particularly developed nations and those that have been the subject of intense lobbying by the United States, have adopted effective mechanisms for enforcement of trademark rights, but many others are hopelessly ineffectual, and often corrupt.

In addition to trademark infringement, many countries also provide an action for unfair competition, although the grounds may not be as flexible as in the United States, which has, not surprisingly, developed an enormous body of case law relating to acts of unfair competition. In most countries that follow British law, such as the United Kingdom, Ireland, Australia, New Zealand, India, Hong Kong and Singapore, to name a few, there is no general cause of action for unfair competition. Rather, such countries have an action for passing off, which is a restricted type of unfair competition. The elements of a case for passing off were generally set forth by Lord Diplock in the Avocaat case, namely a misrepresentation, made by a trader in the course of trade to his prospective customers or end users, that is calculated to injure the business or goodwill of another trader and that actually does or will do damage to the business or goodwill of the plaintiff. Although actions for passing off may be effective in many circumstances, they are also quite complex and expensive proceedings when they are contested. It should also be noted that in many jurisdictions it is possible for the tribunal to issue an award of costs against the losing party for the prevailing party’s litigation costs. This often forces parties to consider carefully whether to bring an action with questionable merits merely as a bargaining chip, as is often done in the United States, since the eventual price of that chip can be quite high.