By Adam Smith
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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