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27
Mar

What makes a Trademark Bully?

Posted by ipelton on: March 27th, 2012

A lot has been written in the news lately about alleged trademark bullies. Reasonable people can disagree whether trademark bullying is a real issue and whether any particular dispute involves a trademark bully.

The trademark system today almost encourages trademark bullying because there is little repercussion for over-enforcement, especially if picking on a small business, because the odds that the small business can afford to fight back may be minimal. And large brands are embolden by the fact that courts often give weight to the fact that they have successfully enforced their trademarks by getting other businesses to agree to change their names or to default in a proceeding. I believe too much weight is given to these occurrences because many of these results are because of funding and have nothing to do with the merits or with the alleged strength of the trademark being ‘enforced.’ 

These dynamics of situations labeled a trademark bullying are changing in some cases as the internet and social media provide small businesses with a potential platform to gather support for their defense. [See my recent post onSocial media and the future of trademark disputes.] But in the end, going to court still costs money. And many small businesses must make a cost/benefit analysis – is fighting for a name worth it even if I win? And can I risk spending money to fight it and lose?

Of course, trademark bullying is not illegal – again there is little legal repercussion although there may be bad publicity – and arguably I suppose could be a valid business strategy as long as there is little if any punishment. 

So, what makes a trademark bully? 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.

In my opinion, when a business asserts an over-reaching claim with heavy handed tactics, the “trademark bully” label fits. The label may fit even if just one factor is present, i.e. the claim is very over-reaching or the tactics are very heavy-handed.

How do you define a trademark bully? Let me know in the comments.

No Bullying Zone 2" sticker

[image from Kansas Bullying Prevention Program]

Related discussions:

  • Brand Bully Basement™ hosted by brandGEEK®. They define the situation as: Trademark bullying happens when a trademark owner over-reaches in the exercise of its trademark rights.  Usually, though not always, this involves a big company threatening unwarranted costly legal action against a smaller company in order to make the smaller company change its trademark.  Trademark trolls — entities that fraudulently obtain trademark rights for the sole purpose of enforcing them — engage in a similar bullying behavior, though most trolls are individuals or small companies.
  • How Fashionable is the Louis Vuitton “Trademark Bully” Label?
  •  

 

11
Mar

TPAC Quarterly Meeting Summary (March 2012)

Posted by ipelton on: March 11th, 2012

The following is a summary of the key points discussed at the March 8, 2012, public meeting of the Trademark Public Advisory Committee (TPAC) at the USPTO.

The meeting covered many topics, including legislative and funding issue, performance measures, developments at the TTAB, and “Trademarks Next Generation.” The most newsworthy item was the announcement by Commissioner for Trademarks Deborah Cohn that a cease and desist letter has been sent by the Office of the Solicitor of the U.S.P.T.O. to the outfit calling itself “United States Trademark Registration Office.” This company has been sending confusing solicitations to trademark applicants and registrants that are of questionable value and are clearly intended to look like official government correspondence. More on these “trademark scams” below.

CFO’s update by Anthony Scardino:

  • The USPTO budget in FY2012 includes $18 million dollars for “Trademark Next Generation” computer items.
  • The FY2013 budget was recently submitted to Congress
  • The FY2013 budget includes funding for an additional 12 Examining Attorneys

Legislative Update by Dana Colarulli:

  • The USPTO’s Detroit office is on target for opening in July
  • The USPTO has received bids for opening two additional satellite locations – more than 60 locations have participated in the process and more than 500 comments have been received
  • Other legislative issues related to AIA and other patent issues

Commissioner Cohn’s update:

  • Performance measures through the end of January 2012 show that trademark operations is exceeding or within the desired range for nearly all targets [see documentation below for details].
  • 75% of all applications processed from start-to-finish entirely electronically.
  • Application filings are up approximately 7.5% over the same time last fiscal year.
  • 11 new Examiners were hired in September and are now ‘on production.’ 15 new examiners have been hired to start March 12, 0212, and another 10 will start in May 2012.
  • Trademark telecommuting workforce continues to expand – it now includes employees in 25 of the 48 continental United States.
  • The “tri-lateral” meeting has become the “TM5″ as it now includes China and Korea as full members. The group met in December 2011 and discussed a variety of issues, including a project to have each member use common status indicators for trademark records and an effort (led by OHIM) for harmonize identifications among the TM5.
  • Craig Morris is leading an effort to expand education and outreach by the USPTO to groups that are not in the trademark bar, and specifically to reach small businesses. A working group has been put together and has met and is working on ways to: engage the private sector to increase free or low cost trademark legal services; provide more CLE’s on trademark policing issues; and to reach out beyond the trademark bar.
  • USPTO held a roundtable on issues related to identification of goods and services on February 24, 2012. The goals for the USPTO are to re-design the structure of the ID manual, to possibly update the descriptions within the manual, and to increase collaboration with industry groups to understand their issues and topics better.
  • USPTO is co-hosting a series of roundtables with INTA. Two have already been held in NYC, upcoming ones include Alexandria, VA, Wilmington, DE, and Boston, MA.
  • The Official Gazette will no longer be printed on paper at some point in the near future (this year). There are only 150 print subscriptions worldwide.
  • 2012 Trademark Expo will be held October 19th and 20th.

Solicitations from trademark related vendors:

  • The volume has “blossomed” in recent months.
  • USPTO has placed new warning on the trademark landing page.
  • Commissioner Cohn announced that a cease and desist letter was sent last week by the Office of the Solicitor of the U.S.P.T.O. to the outfit calling itself “United States Trademark Registration Office.”
  • United States Trademark Registration Office has been sending trademark applicants and registrants solicitations that are deceptive.  Many have thought they are from the USPTO given the similarity in names and the letter’s official look and feel.
  • Commissioner Cohn noted that the letter invokes Section 43(a) of the Lanham Act.
  • The Commissioner also noted that if anyone – attorneys, applicants, etc. – have any information about United States Trademark Registration Office or have been mislead by their mailing, they are encouraged to file an on-line consumer complaint with the Federal Trade Commission (“FTC”), at www.FTC.gov and/or contact the USPTO via TMFeedback@uspto.gov.

TTAB Update – Judge Rogers:

  • A new senior attorney, Cheryl Butler, was recently hired. Her duties include updates to the TBMP. An update to the TBMP is planned for sometime around May.
  • Cindy Greenbaum has been hired a the newest TTAB judge. She for the moment still in her former role managing the interlocutory attorneys until that role is be filled by a new hire, for which the process is underway.
  • TTAB is deploying a new “quality review” unit. The unit was formerly a pilot program and will now become permanent. One of its roles is to help to ensure accuracy in the history of proceedings in TTABvue, which is also helpful for having better and more consistent data for use in performance and other measures.
  • 20 precedents have been issued so far this (fiscal) year, up from the 38 issued the previous year.
  • The backlog of cases at the TTAB has increased lately [see data below]. The number of incoming filings has seen some numbers up and some down from quarter to quarter over the last few years. But given increases in application filings the last two years, it is likely that TTAB filing numbers will trend up more consistently in the future if the application filing increases continue.
  • A few more cases are under ACR than in the previous years.
  • TTAB may hold an ACR roundtable over the summer once the staffing issues are addressed and filled.
  • The number of cases operating under the old rules is down to 268, 58 of which are suspended for settlement.

CIO’s report – John B. Owens II & Raj Dolas

  • TEAS update a few months ago allowed for the submission of additional “non-primary” addresses. However, a glitch in the USPTO system meant that until recently many of the “non-primary” addresses were not receiving any updates. USPTO is now fixing this situation.
  • Many projects are underway for a variety of new and/or improved computer systems.
  • TSDR 2.0 will be coming soon and will include links to assignment and TTAB documents.
  • I asked about TSDR and the phase out of TARR. I noted that:
    • a static link would be very useful to practitioners so they could provide to clients and others to view their filings online.
    • more advance notice to outside users about the “sunsetting” or changing of systems would be very useful
  • The CIO noted that they were aware of the disruption caused by the planned TARR > TSDR changeover but that TSDR will replace it and will be a much better and more flexible system. TSDR does have capability for generating static links and they will likely make that information available.

Trademark Public Advisory Committee (TPAC) – March 9, 2012 documents

14
Feb

House of Representatives Judiciary Committee to hold hearing Friday on “Litigation as a Predatory Practice”

Posted by ipelton on: February 14th, 2012

This Friday morning (February 17, 2012), the Subcommittee on Intellectual Property, Competition and the Internet of the Committee on the Judiciary of the U.S. House of Representatives (try saying that 3 times fast!) is holding a hearing entitled “Litigation as a Predatory Practice.”

As of this writing, no details have been posted regarding the topic or the witnesses. It is my hope that the committee will address the USPTO’s “Trademark Litigation Study” conducted and released last year. It is possible that the hearing will cover patent trolls. In recent years, Congress has shown little interest in trademark matters. Since the study was commissioned in a bill from the Senate Judiciary Committee in early 2010, the topic has not been addressed by either chamber of Congress in any manner. The hearing, in my opinion, has largely fallen on deaf ears. This result may have been expected since the mantra of the study was that there really is no problem regarding trademark litigation tactics and nothing major should be done to address any perceived problems.

[Note: Last Spring, I sent a letter to the Senate judiciary committee Chairman calling for hearings on the trademark litigation tactic issues.]

For more details on Friday’s hearing, see the hearing calendar, which hopefully will soon reflect more details.

I plan to attend the hearing and of course will report in this space on any trademark related news from it.

 United States House of Representatives, Committee on the Judiciary

 

8
Dec

Suggestions to USPTO for educating public and small businesses about trademarks

Posted by ipelton on: December 8th, 2011

Last week, the USPTO hosted a public forum on “Continuing Legal Education Programs on Trademark Policing Measures and Tactics.” This forum was a follow up to one of the recommendations made in the Department of Commerce’s study on trademark litigation tactics completed earlier this year for Congress.

The forum was held with the Commissioner for Trademarks, Deborah Cohn, and the Director of the USPTO David Kappos. About twenty people attended from the USPTO and the public, including representatives from the major intellectual property bar associations.  I attended and participated in the discussion. A summary of the forum by the USPTO was posted on the USPTO.gov website this week.  Commissioner Cohn closed the event by encouraging follow up from anyone with additional ideas or thoughts.

Of course, I have many ideas on the subject! More education of the public and small businesses would benefit the trademark system as a whole and all brand owners in many ways.

I have sent a letter to Commissioner Cohn (below) featuring a list of suggestions and a call for the USPTO to convene a committee or working group to continue and further the efforts to enhance public and business education about trademarks in general and about trademark infringement and litigation issues.

Do you have additional ideas? Let me know in the comments!

Dear Commissioner Cohn,

Thank you for the opportunity to participate in the recent forum on “Continuing Legal Education Programs on Trademark Policing Measures and Tactics” hosted by the USPTO on November 29th. It is always an honor and privilege to meet with you, Director Kappos, staff from the USPTO, and esteemed members from the trademark bar.

I am pleased that the forum produced a consensus that an effort, spearheaded by the USPTO, to provide more education and information for the general public and businesses owners about trademarks in general and trademark policing issues would be beneficial. I write to follow-up regarding some further ideas and suggestions for such initiatives.

As I noted at the conclusion of the forum, I believe it is critical that the USPTO organize and lead these educational efforts. As a government agency, the USPTO has a much broader “constituency” and is better positioned to reach diverse group of individuals and businesses. Intellectual property associations, on the other hand, are primarily set up to work on behalf of their members. Some intellectual property associations have an inherent potential conflict of interest when it comes to spreading a message benefiting all business owners, brand owners, or the public as a whole, rather than merely their membership.

The USPTO already provides excellent information on many topics in a variety of places, including educational materials for students, printed brochures and guides, and seminars such as those at the Trademark Expo. Expanding the breath and amount of content, as well as the reach and distribution, is very achievable. To address more directly the issues tackled in the April 2011 Report to Congress on trademark litigation tactics, the content must include information about trademark infringement, policing, litigation, and defenses, along with general trademark and registration information. Providing businesses and brand owners with a greater understanding of the potential risks of adopting and using trademarks, as well as the range of issues, defenses, options, and costs at play when brand owners make or react to allegations of infringement, will benefit the trademark system at large, the public, the economy, the courts, the Trademark Trial and Appeal Board, and the USPTO.

Potential channels for disseminating information by the USPTO, with the assistance from stakeholders, include:

  • U.S. Small Business Administration (SBA);
  • Local chambers of commerce;
  • USPTO (or constituent) speakers and exhibits for industry associations and conferences, particularly  those that have large numbers of small business members (i.e. software developers, blogs, restaurants, toys, retail merchants, music, real estate, electronics);
  • Websites and other online resources of the USPTO, SBA, and Department of Commerce;
  • Patent and Trademark Resource Centers (PTRC);
  • State agencies handling incorporation and/or fictitious name filings (I find that a large number of unrepresented new businesses believe that filing with the state protects their brand name.);
  • Small Business Innovation Research (SBIR) / Small Business Technology Transfer (STTR) communities;
  • International trade organizations and federal and state trade agencies, such as International Trade Administration (ITA);
  • Institute for Intellectual Property and Social Justice (IIPSJ);
  • Law schools;
  • Business schools;
  • Community colleges;
  • Undergraduate universities (in particular, business and entrepreneur clubs);
  • Grade schools and high schools (in particular, business and entrepreneur clubs);
  • Business bar associations and other bar associations and sections that are not primarily composed of members in the field of intellectual property;
  • Inventors networks, clubs, and conferences;
  • Small business associations such as National Small Business Association (NSBA), the National Federation of Independent Businesses (NFIB); and others.

In providing information pursuant to this outreach effort, every effort should be made to have offerings in a variety of formats, media, and locations. For example, the outreach should include, but not be limited to, printed materials, electronic materials, videos, physical seminars, virtual seminars, social media, and exhibits at conferences. An additional, smaller trademark expo held outside of the Washington metro area in collaboration with local businesses, attorneys, and chambers of commerce would present an incredible opportunity to expand the success of the National Trademark Expo.

As it was aptly noted at the forum, “an ounce of prevention is worth of a pound of cure.”  Educating the public and business owners on trademark issues will benefit all – applicants, registrants, common law rights holders, the USPTO, the trademark bar, and others. With the leadership of yourself and Director Kappos and the continued willingness of the USPTO to team with its many constituencies, these efforts can have a significant effect to make the USPTO and the trademark system even more valuable for brand owners, business owners, the public, and the American economy.

To kick-start the efforts, I urge the USPTO to immediately convene a committee or working group to focus and lead on these issues and to develop specific outreach strategies to implement in the next year. Such a committee could include representatives from the USPTO, TPAC, Department of Commerce, SBA, small business community, academia, and the trademark bar.

Thank you for your continued outreach and leadership on these issues. Do not hesitate to let me know if there is anything I can do to advance these goals.

Sincerely,

Erik M. Pelton

Erik M. Pelton & Associates, PLLC®

 

Commissioner for Trademark Deborah Cohn (photo via uspto.gov)

25
Nov

SBA’s “Steps to Starting a Business” fails to protect intellectual property

Posted by ipelton on: November 25th, 2011

The U.S. Small Business Administration recently published an article called Follow These Steps to Starting a Business.

The article makes some good suggestions for important practical steps that small businesses should do when launching a new business, such as determining the legal structure, getting a tax ID,  and obtaining licenses and permits.  The suggestions don’t really address at all the necessity to have a creative idea, an idea about to whom it will be sold and how it will be marketed. It does recommend a business plan, although some people believe such plans to be overrated and to actually limit long term visions for growth and achievement.

But the ‘steps’ suggested is that they do not properly cover intellectual property. While registering the business or fictitious name with the state is recommended, such filings do not provide any real protection and can be terribly misleading. Generally, a business in the same state would be blocked from registering an identical name. But if they change the spacing, add a basic word like “The” or “Inc” it generally will not block the name. And the register is only within the individual state, providing minimal protection in the other 49 states. Other intellectual property protection is not included in the recommended steps in the SBA article. 

Any list of top 10 steps to starting a business should include “Protect Intellectual Property.” If the IP is not protected, any growth or value achieved by company could be significantly affected or limited. If a trademark is used in during start up – and not protected – and shortly thereafter an  infringement situation or accusation arises, the result could included costs that could have been avoided, uncertainty, delay, or worse – changing brands mid-stream and confusing customers.

If I were writing for the SBA, here is what I would tell start ups about the value of protecting their intellectual property:

Most new businesses in the 21st century are built around a significant amount of intellectual property. Between brand names, logos and slogans used in marketing  (trademarks); content in the form of web pages, blogs, video, software, and more (copyrights); and patentable inventions; intellectual property is often a key to the potential success of any new venture. As a result, early in the start up phase – ideally before the doors are literally or figuratively opened – business owners should take steps and investments to make sure intellectual property can be and is protected.  In addition, small businesses should be careful to include intellectual property provisions in contracts with partners, employees, contractors, and others to properly control and acknowledge who owns newly created intellectual property.

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