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.
[image from Kansas Bullying Prevention Program]
- 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?