Trevor Little

In a press release issued last week, HomeVestors of America highlighted the range of legal actions it initiated in 2016 and pointed to its growing reputation for aggressive trademark enforcement. For many companies, the ‘aggressive’ label is one to be avoided – so we reached out to obtain insight into the business motivations for shouting about its willingness to litigate. 

HomeVestors of America is the largest professional house buying franchise in the US, engaging in the recruitment, training and support of independently owned franchises that focus on the buying, rehabbing, selling and holding of residential properties. Bonnie M DePasse, Vice President, General Counsel, tells World Trademark Review: “As one of the largest players in the residential real estate investment industry, and the only known franchise of its kind, HomeVestors of America, also known as the We Buy Ugly Houses company, recognises the importance of protecting its trademarks from theft and brand dilution.” The sentiment is one that will be shared by all other franchise operators but in addition to enforcing its marks, HomeVestors has adopted a strategy of publicising its many actions.

Following on from similar statements in previous years, last week a press release (titled ‘HomeVestors shuts down more than 100 trademark infringers in 2016’) hit the news wires, proclaiming that the company was entering 2017 with a “growing reputation for aggressive trademark enforcement”. To that end, it lists the enforcement actions the company launched in 2016, pointing to two dozen trademark infringement lawsuits. It expands: “Defendants in the lawsuits are in 12 states, including Arizona, California, Florida, Colorado and Texas. Additionally, in 2016, HomeVestors was also successful in eradicating 117 instances of trademark infringement on outdoor advertising and competitors’ websites without litigation, and 283 infringing social media posts and online advertisements were taken down or cleansed of their HomeVestors trademarks.”

As noted, a reputation for aggression is something that many companies seek to avoid, even if they have a zero tolerance policy, so a press release focused on the litany of legal actions initiated by a company is not a regular sighting.

When asked about the company’s strategy, DePasse first points to a legal duty to enforce. While noting that multiple warnings are sent to infringers before the company resorts to litigation, she observes: “Trademark law requires that HomeVestors maintain a zero tolerance policy towards trademark infringement.  Courts have interpreted the Lanham Act and common law to require that trademark holders uniformly and universally enforce their trademarks against any infringer.”

However, enforcement is one thing, shouting about it is another and in this respect she identifies three key motivations behind the publicity drive. The first is centred on awareness. In addition to signalling to franchisees “that the investments in their franchises are being protected”, DePasse notes that the press release assists the company in “alerting new or less knowledgeable competitors about its trademarks and that those trademarks cannot be ‘borrowed’ by someone else”. Second, for those that may still be tempted to cross the line, the release is regarded as a potential deterrent to infringement – giving notice that the company “takes enforcement of its trademarks seriously and will actively pursue infringers when necessary”.

Finally, there is an economic motivation – to attempt to save legal budget by reducing the need to take action. “HomeVestors is not litigation-adverse,” she observes. “However, we recognise the economic benefit of providing public alerts related to our position on trademark enforcement, which we think results in decreased infringement activity and is less expensive than paying our attorneys to pursue infringers in court.”

Interestingly, in the release HomeVestors co-president Ken Channell praises the legal team for doing “an outstanding job” of protecting the company’s credibility but when asked if shining a positive spotlight on the department was part of the decision-making process around the public statement DePasse answers in the negative: “Praising the legal team was not a motivating factor in publishing the trademark infringement press release; however, it is appropriate to acknowledge those who are doing the work and achieving success.”

We operate in an age where aggressive enforcement action is often decried online, and can cause a backlash. But, to date, HomeVestors appears to have avoided that fate. The natural question to ask is whether more companies should be taking a similar approach: namely, talking about enforcement levels rather than have them operate largely under the public’s radar. Such a strategy is not for everyone but – while noting that the company isn’t in a position to advise others on the strategies they should adopt, DePasse concludes: “HomeVestors has found public disclosure of its trademark enforcement successes to be worthwhile.”

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