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Posts Tagged ‘bullying’

Last month, the Chairwoman of the Federal Trade Commission (FTC) announced that the agency would be investigating patent trolls and patent litigation tactics.

See NY Times article and transcript of June 20, 2013 speech by Chairwoman Edith Ramirez.

Will the FTC ever investigate trademark scam operators?  Will they investigate whether abuse trademark litigation practices stymie innocent trademark owners, small businesses, innovation, and the US economy?

US-FederalTradeCommission-Seal.svg

On Monday, the state House of Representatives in Minnesota held an informational hearing on trademark bullying. See video below. This is a welcome development. The panel heard from businesses about the costs and difficulties of defending allegedly overreaching trademark lawsuits.

Since the federal Congress has done little or nothing to consider this issue, this is a welcome development. As detailed on this blog in many posts, in 2010 Congress ordered the USPTO to study “abusive litigation tactics” in the field of trademark. The USPTO sought public comments and in April 2011 issued a report with its findings. Since the study, there have been no public hearings by Congress on the issue. There has been some activity by the USPTO to increase education to the public and business community about trademark issues.

The Study actually made three recommendations (while finding no real problem): (1) urge pro bono efforts from private sector, (2) urge more CLE (continuing legal education) programs on trademark litigation issues for attorneys, and (3) enhance outreach from several government agencies. To my knowledge, nearly two years after the Study, very little if anything has been done regarding (1) and (2).

So to see Minnesota House of Representatives taking on this issue is refreshing. Small businesses are critical to the vitality of the US economy. If Congress is unwilling to help these businesses deal with unfair trademark litigation tactics (which I believe do exist and could be rectified at least in part, though reasonable people could disagree), others must take up the cause.  The SBA, US Chamber of Commerce and other small business advocates have all been largely silent on these issues as well.


Thank you to the House of Minnesota for taking on this issue!

Related posts:

Last week I spoke at the New York State Bar Association and presented on “Trademark Bullying & the Streisand Effect“. The talk was very well received. My favorite feedback was that perhaps trademark attorneys, when counseling their clients about the risks of being “shamed” or having social media backlash after sending a cease and desist, should show my slides and present the stories of the “Streisand Effect” enumerated therein. Perhaps even strong-willed client CEOs would then recognize the risk of being shamed and re-visit a very aggressive trademark enforcement policy.

My slides and paper follow below.

Trademark Bullying & the Streisand Effect (Erik Pelton – NYSBA 2012 IP conference)

 

A formula for measuring trademark bullies

Posted by ipelton on: September 20th, 2012

Several months ago I wrote about what make a trademark bully. I noted that:

I look at two factors to asses whether a “bullying” label is appropriate: whether the claim is over-reaching and whether the tactics are heavy handed. Over-reaching occurs when the alleged infringer is really making no commercial impact on the enforcer. For example, when the alleged infringer’s use is trivial; their industry or market or products or services are quite different; or there are already tons of third party uses of similar marks and the claim has no merit. Bullying tactics include unreasonably demanding letters, such as: “respond that you are in compliance with all of our demands within 48 hours.” Or seeking discovery that is overly burdensome and irrelevant just to run up costs for the other party. Or failing to seek a compromise that accomplishes the goal of avoiding confusion or dilution before litigating.

I presented this theory last week to an audience at the New York State Bar Association’s IP conference, where it was general met positively. So I further enhance my formula:

to determine if company X is a trademark bully

= [ strength/weakness of claim's merits] x [ harshness of legal tactics used ]

A claim with tenuous merits may make for a bully regardless of the tactics. Many have praised Jack Daniel’s as the opposite of a bully for its gentle request that an author to change the cover of his book – because they asked him with extreme courtesy and made no ‘demands’ – but arguably they were still bullying because the law gives them no actual right to force him to change the cover.  

If a plaintiff’s tactics are overly harsh – requesting unnecessary and burdensome discovery, or filing motions for the purposes of delay, to give two examples – they should be labeled a bully even if they have a reasonable claim on the merits.

Reasonable people can disagree about whether claims have merit or tactics are abusive, but at some point a threshold is crossed and, according to my formula, a bully is born.

 

Reasonable claim

with

Reasonable tactics

[NOT BULLY]

 

Reasonable claim

with

Unreasonable tactics

[bully?]

 

Unreasonable claim

with

Reasonable tactics

 [bully?]

 

Unreasonable claim

with

Unreasonable tactics

[BULLY!]

 
(C) 2012 Erik M. Pelton & Associates, PLLC

In the diagram above, if a plaintiff makes a reasonable claim with reasonable tactics, it cannot fairly be labeled a bully.

If a trademark plaintiff is squarely in the lower right box, they are a trademark bully.

If a company’s actions fall within the remaining two boxes, they are open to potentially being accused of bullying.

What do you think, does the formula work? Any feedback in the comments below is greatly appreciated!

(C) 2012 Erik M. Pelton & Associates, PLLC

The New York State Bar Association’s Intellectual Property Law Section Annual Meeting will be held September 14-15, 2012 in New York City. 

I will be speaking on a panel  called “INITIATIVES TO ADDRESS TRADEMARK BULLYING”

The USPTO recently requested comments from companies and practitioners on ways to address problems (whether actual or perceived) with over-aggressive policing and enforcement of trademark rights. The comments did not result in any new regulations, but whether small trademark owners are being unfairly taken to task is a sensitive subject engendering much controversy. Are the large trademark owners playing fair in vigorously protecting their goodwill? Our panel of practitioners, including a former USPTO examiner, will share their views.

Moderator:     Peter S. Sloane, Esq., Leason Ellis LLP, White Plains
Panelists:        

      Susan Upton Douglass, Esq., Fross Zelnick Lehrman & Zissu, PC, New York City

      Erik M. Pelton, Esq., Erik M. Pelton & Associates, Arlington, VA

The “bullying” topic has not gone away following the USPTO’s report last year. If anything, media coverage of possible or purported bullying situations has increased in 2012.

For more details about the conference, which also features sessions on TLD’s, design patent litigation, and more, see the NYSBA website.