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United States - Obama green lights US trademark study
By Adam Smith
(1 comment)
March 22 2010
Last week President Obama signed into law a new US trademark act that contains the provision for a study into mark owners' litigation tactics. But the big question is: will the study uncover anything that mark owners don't already know?
Over and above a technical fine tuning of the US trademark system, the Trademark Technical and Conforming Amendment Act 2010 provides for a study to examine "the extent to which small businesses may be harmed by litigation tactics by corporations attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner".
During recent years there has been a great deal of fuss made in the mainstream US media over large brand owners enforcing their rights against small businesses, often aggressively. A recent example, when Monster Energy Drinks sought to prevent a microbrewery's use of the mark VERMONSTER for beer, happened in the home state of the act's sponsor, Senator Patrick Leahy.
But if Leahy hopes that the study will find trademark monsters who exploit the system to quash legitimate competition, he may be disappointed.
The study is more likely to get stuck in the natural cycle of the system: that companies with strong trademark portfolios have a good grasp of IP law and regularly come up against small companies that, owing to their small size and turnover, may not have a thorough understanding of trademark law or have not implemented a thought-out brand strategy.
"One person's trademark bully is another person's attempt to protect their brand," suggests Ryan Gile, author of the Las Vegas Trademark Attorney blog and an attorney at Weide & Miller. "The only thing this study will show is that there are a lot of small businesses that are having to change their names or marks because someone out there feels that they have superior rights."
Nevertheless, the issue is apparently a big enough one to warrant a joint effort of the United States Patent and Trademark Office (USPTO) and the IP enforcement coordinator. Although some observers predict little of interest will come of the study, it is possible that some interesting trends may emerge. In the least, this study will focus on a very specific - but crucial - aspect of trademark practice: litigation.
Michael Atkins, attorney and shareholder at Graham Dunn and author of the Seattle Trademark Lawyer blog, points to statistics proving the existence of trademark bullies. "We're seeing more and more trademark filings but fewer and fewer trademark trials," he told WTR. "This arguably suggests that trademark owners are using demand letters and trademark filings to exercise their might and to extract something that they may not legally be entitled to by the court process."
WTR contacted the USPTO to find out when the office plans to start work on the study, but has so far received no answer.
For further reporting on this topic, see "Trademark monsters: tackling Lanham Act bullies".
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This is the classic USA Catch 22. Everything has to be decided based upon anecdotal stories. If you have a mark and you don’t enforce it, you can lose the right to enforce it. If you attempt to enforce it, then you are a bully because someone wants to use your name or at least goodwill for free.
What was Monster supposed to do? It had to act against VERMONSTER. It seems irrefutable that the owner of Vermonster was hoping to capitalize on Monsters fame. Why should not a good old boy from Vermont get a little free use of MONSTER?
This is another solution in search of a problem. Let’s waste more taxpayer’s money.
On a particular issue in the article that seems to be a key basis for the “study”, I do not understand the logic of the argument set forth in this paragraph: "...We're seeing more and more trademark filings but fewer and fewer trademark trials," he told WTR. "This arguably suggests that trademark owners are using demand letters and trademark filings to exercise their might and to extract something that they may not legally be entitled to by the court process."
I do not see why more trademark filings but fewer trials "arguably" suggests TM owners are "extracting' something they "may" not be entitled to. I do not see the logical connection in the argument.
First, "may" is a great waffle word. It allows making an argument without committing to anything. It "may not" be true also. Second, the "something" being "extracted" “they may not be entitled to” is not explained. Extracting what? The implication is that it is something unfair. This is not necessarily true at all but makes great fodder for the politicos. Third an equally plausible argument exists. It is that more companies, large and small, are becoming more knowledgeable about TMs and are not litigating some cases for completely logical reasons - they don't want to waste money litigating something they do not think they can win. Why is that a problem except to those who make money litigating?
Taking the example of VERMONSTER, the owner of MONSTER had no choice but to object to this use - VERMONSTER was clearly infringing and diluted MONSTER. If the owner did not object then they were permitting others to use their TM without permission and under USA law were starting down the road of having an unenforceable TM. Apparently, the owner of VERMONSTER decided it could not win. How is that "extracting" something the owner of MONSTER was not entitled to? It obviously was entitled to win and had to act. Would the writer find "VERNIKE" be acceptable? How about “NEWYORKPLAYBOY, TEXASZIPPO, CALIFMERCEDES, etc? I think not.
ZIPPO is a well known mark owned by a small company. ZMC is required by law to enforce its TM on pain of losing it. We have to be careful about our most valuable asset. People try to use ZIPPO every day to sell competing products, counterfeit products and products in other classes of goods. We send C&D letters to TM infringers frequently and have no choice in the matter. We protect it or lose it. No study is going to change that fact or what we need to do.
This seems to me to be a gambit to try to limit TMs to allow entrepreneurs to capitalize on the goodwill of a mark and get a free ride. A little more wealth transfer Washington style! In addition it will subsidize the litigation bar – as if the USA needs more of that!
The supporters of this ought to try a few years protecting their marks in the USA, China and 160 other countries before getting on this bus. The USA weakening TMs would be another completely idiotic move.
Charles Jeffrey Duke, Zippo Manufacturing Company Inc on 23 Mar 2010 @ 19:02
