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International - Microsoft’s trademarks symposium establishes new forum for industry debate

By Adam Smith
February 04 2011

In a refreshing move, yesterday Microsoft hosted a congress on trademark law and practice. The symposium, co-organised with the McCarthy Institute at the University of San Francisco, brought together eminent speakers and, moreover, moved trademark discussion to a new level. The event seemed to say that one of the world’s most valuable brands can drive debate on trademarks from a unique platform that is perhaps more conducive to solid discussion than traditional forums.

The day began with none other than China’s top IP judge. Judge Kong, the chief judge of the Chinese Supreme Court for Intellectual Property, opened with an overview of trademark law in China. He even went so far as to reveal something of China’s latest thoughts on this topic: “We have been saying that maybe it’s time to revise the trademark law again, so the discussion is about how to improve trademark registration by simplifying the procedure.”

Tantalisingly, the judge admitted the problem of “malicious individuals” taking unfair advantage of the first-to-file system. “We’re talking about how to deter malicious registrations,” he told the crowd, made of mostly of US attorneys, but also a significant Chinese contingent. There certainly seemed to be an air of learning between these two very different systems, not least with eminent US trademark scholar J Thomas McCarthy in the room. WTR heard that McCarthy’s work is of great interest in China: one wonders whether, given the judge’s comments, the Chinese are considering cherry-picking some of the best US trademark law doctrines.

China is certainly becoming a more favourable jurisdiction for foreign brand owners – an ongoing trend for several years now. One milestone was the case described at the symposium by Unitalen’s Ping Gu: that of BMW v Century BMW. Ping highlighted the comments of the presiding judge in that case that, “by confirming their well-known trademark status, we hope to give such famous brands wider and stronger judicial protection”.

From this, the programme moved on to perhaps the most intellectually stimulating of sessions, as two academics presented the findings of their respective cutting-edge research programmes around keywords advertising. This was no ordinary keywords session, which have become the mainstay of trademark conferences in recent years. Here were leading thinkers revealing valuable third-party research into the economic impact of search engines’ use of terms such as ‘sponsored link’ versus ‘ads’ (Ben Edelman from Harvard Business School) and what consumers think of sponsored links, such as whether they understand the business models at play (David Franklyn from the McCarthy Institute at the University of San Francisco). Both professors will be publishing their research with further detail soon, work that will no doubt drive the debate around trademarks and keywords forward.

For his luncheon keynote address, Microsoft’s IP chief took delegates back to China. Horacio Gutierrez, corporate vice president and deputy general counsel for intellectual property and licensing at Microsoft, delivered some astounding facts that illustrate the scale of China’s economic and IP landscape. Admirably, Gutierrez did not shy away from foreign trademark owners’ key concerns in China. While he praised the great enforcement efforts by the authorities, he also noted that, “in 2009, the number of trademark enforcement cases handled by China’s State Administration for Industry and Commerce (SAIC) declined by 9.87%, and total fines dropped by about Rmb800,000 (about $122,000). The SAIC data also shows that, while Shanghai and other cities remain active in protecting foreigners’ rights, in some parts of rural China there appears to be no administrative enforcement on behalf of foreigners. We urge China to reverse these trends.”

From this gentle nudge, the programme moved onto a topic about which it is difficult for trademark owners to be diplomatic: new gTLDs. In a somewhat brave appearance, the chair of ICANN’s board, Peter Dengate Thrush, stood up to explain the new gTLD programme and to describe the hitherto long and tortuous road in the policy development.

As is often the case when this issue is discussed among trademark attorneys, most people in the room knew little about it, while a handful knew an awful lot. What followed Dengate Thrush’s address was a rather spectacular and systematic argument against the programme and the policy development process by INTA’s Alan Drewsen. Unable to appear in person due to snowed-in airports in the east, Drewsen spoke from his office in New York. He took the opportunity to put directly to ICANN’s chair the complaints of INTA members. Drewsen’s disembodied but blunt, almost punitive voice, fell from above on Dengate Thrush, who scribbled hurried notes and told the crowd: “You’re seeing the ICANN process in action.” This might not have alleviated Drewsen, who couldn’t ‘see’ it anyway, but told Dengate Thrush: “The cost to trademark owners and the public are indisputable… The proposal for unlimited expansion of gTLDs is a bad idea or, at best, an idea that has not yet been justified.”

The final panel of the day tackled the edgier areas of dilution in the United States, most memorably a trademark owner’s responsibility to be careful during enforcement actions. “The perspective among consumers that we are big brands bullying consumers is growing,” said one panellist. “I don’t think we’re doing enough to educate consumers about brand protection – ie, that trademarks are consumer protection.”

The point was expanded upon by McCarthy, who delivered the keynote by warning brand owners against sending “shock and awe” cease and desist letters. In a typically erudite address, McCarthy recommended tailoring cease and desist letters accordingly, and avoiding scare tactics. When WTR put it to him that this was a bold suggestion to give to a room full of US attorneys, he said: “Well, they need to be told.”

McCarthy’s comment reflects the candour of the symposium held in his name. The organisers, Franklyn and Microsoft’s Russ Pangborn, drew together an excellent programme with brilliant speakers. One of the most enjoyable aspects of the symposium was its merging of industry practice with academic thought – people from one side of this fence considered the positions on the other, and vice versa. It led to a practical but intellectually provocative day. Let’s hope it becomes a mainstay in the trademark calendar: this sort of symposium certainly makes a significant contribution to the trademark ecosystem.

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