Senator Patrick Leahy (D-VT) introduced a bill, The Trademark Law Technical and Conforming Amendment Act Of 2010 (S. 2968), that called for a mandatory study by the Deparment of Commerce to examine whether large corporations are using trademark law to harrass smaller businessses by exaggerating their scope of their trademark rights.
The PTO responded in part by concluding there might not be a problem with trademark bullies after all.
Nonetheless, the PTO goes on to say: “However, to the extent small businesses are disproportionately adversely affected by such tactics because they lack the funds to hire counsel to defend against them, we believe the Federal Government can undertake the following actions:
- Engage the private sector about providing fee or low-cost legal advice to small businesses via pro bono programs and intellectual property rights clinics;
- Engage the private sector about offering continuing legal education programs focused on trademark policing measures and tactics;
- Enhance Federal agency educational outreach programs by identifying resources that enable small businesses to further their understanding of trademark rights, enforcement measures, and available resources for protecting and enforcing trademarks.”
These suggestions are fine, but what about addressing the problem through the market? I can’t say with certainty it would solve the problem, but what I think is needed is serious study about whether the Lanham Act should make an award of attorney’s fees to the prevailing party routine, rather than limiting an award to “exceptional” cases.
Mike raises an interesting point. A shift to a true “loser pays” system might be a good way at deterring trademark bullies from proceeding with questionable litigation.
But what about cease-and-desist letters? In many cases, the accused infringer will back down before litigation begins. Knowing this, a mark owner could send out letter, hoping for a quick settlement. If the accused infringer dug in its heels in response to what might be a shaky claim, the mark owner could simply walk away, risking little (other than the possibility of the accused infringer trying to get a declaratory judgment). This, too, is a real instance of trademark bullying. So how do we get this practice to stop?
The study touches on (but unfortunately leaves out of its recommendations) what I think the true problem is here:
Mark owners may, however, sometimes be too zealous and end up overreaching. Sometimes
they may have an over-inflated view of the strength of the mark and thus the scope of their rights
(e.g., they consider their mark famous when it may not actually qualify as famous). Other
times, they mistakenly believe that to preserve the strength of their mark they must object to
every third-party use of the same or similar mark, no matter whether such uses may be fair uses or
otherwise non-infringing. They may lose sight of the fact that the effectiveness of enforcement is
not measured by how frequently they enforce, but rather by the effect that taking or failing to take
action has in the marketplace. “The real question is public perception of plaintiff’s mark, not a
battle count of how often it has sued others.”
There’s no doubt that the duty to police one’s mark is important. If trademark rights are essentially about distinctiveness and source indication, it makes sense to ask mark owners to take steps to weed out potentially confusing marks. But sometimes this duty starts to look more like a bind. Last spring, I bloggedabout a Minnesota nonprofit that was sued by LEGO Group for use of the name “Project Legos”:
And, although it’s hard to see LEGO coming off as anything other than Goliath, the Star Tribune does touch on an interesting point that’s always at issue in David versus Goliath cases– the obligation of mark owners to take measures to diligently protect their mark. According to Dean Karau of Minneapolis law firm Fredrikson & Byron, who is quoted in the story, “If LEGO doesn’t take steps to enforce its trademark rights when it learns about a possible infringement […] that fact could be used against them in a future litigation with a larger, more well-heeled entity.”
So maybe we need to rethink the way we ask mark owners to think about their trademarks. A more nuanced version of the duty to police would take into account the concerns underlying the duty to police (preserving a mark’s integrity, etc.) and balance these against the social good of preventing trademark bullying.
How, exactly, we craft this doctrine is probably best left to judges, law professors, and the USPTO itself– and not to young attorneys like your humble blogger. In the meantime, however, as I’ve noted before, I still see public relations concerns as one of the best gatekeepers in terms of preventing trademark bullying.