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The Mark of a Real Trademark Bully

Posted in Dilution, Domain Names, Famous Marks, Trademarks, TTAB

Seems as though there is a lot of discussion and news reports these days about bullying and how to put a stop to it: School bullying, workplace bullying, and cyber-bullying, to name a few of the most common types. Fair enough, as I recall, my seventh grade PE teacher was a real bully.

However, for those of you who haven’t heard yet, there also is growing interest in examining a brand new type of bully, and they are calling this creature the "trademark bully".

That’s right, the U.S. Patent and Trademark Office (USPTO) is currently seeking information about various litigation tactics, including whether "you think trademark “bullies” are currently a problem for trademark owners, and if so, how significant is the problem?" If you have an opinion on these questions, please share your views below, and the USPTO would like to hear from you here.

So, what is a "trademark bully" you ask? The USPTO’s survey provides this definition: "A trademark ‘bully’ could be described as a trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow."

The USPTO’s "trademark bullying" inquiry apparently stems from some language in the Trademark and Technical Conforming Amendment of 2010, directing the Secretary of Commerce to "study and report" to Congress on “The extent to which small businesses may be harmed by litigation tactics attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner.”

Beyond a "reasonable" interpretation of the scope of rights granted to the trademark owner? Of course, the plaintiff and defendant will never agree on what might be considered a "reasonable" interpretation of the scope of plaintiff’s trademark rights, even in the most routine trademark cases, so whose perspective decides what is reasonable for the purpose of applying the trademark bully label, and what are the consequences, if guilty? Moreover, who decides what "might be" reasonable under the circumstances, since those additional qualifying terms appear in the USPTO query?

In addition, I’ve heard before that "reasonable" minds can differ on just about anything. And, in my experience that is especially so when it comes to arguing and deciding trademark disputes, where litigants argue over and decision makers are asked to carefully balance the evidence according to a number of multi-factor tests, including likelihood of confusion, trademark fame, likelihood of dilution, and bad faith intent to profit, to name just a few. This isn’t exactly black and white material. Then, add to all that, an understanding that trademark rights are dynamic, not static, their scope can shrink or grow over time, and also recognize that trademark attorneys have an ethical duty to zealously represent their clients

So, even with all that, we’re still to decide how to apply the trademark bullying label based on mere reasonableness? Sorry, but that seems, well, unreasonable to me.

I guess my concern with a mere reasonableness standard is that the requisite level of culpability sounds like nothing more than a simple negligence standard. Indeed, the traditional definition of "bullying" seems to require much more, i.e., a pattern of intentional harm: 

Bullying is an act of repeated aggressive behavior in order to intentionally hurt another person, physically or mentally. Bullying is characterized by an individual behaving in a certain way to gain power over another person.

If we learned anything about intentional conduct, at least in the context of trademark fraud cases, we learned that unreasonable legal positions, negligence, and even gross negligence are insufficient to trigger liability. A specific intent requires a much higher level of culpability under the Federal Circuit’s landmark decision in In re Bose, although it is presently unclear whether recklessness will suffice.

In the end, I’m not convinced the trademark system needs an overhaul, or even a new cause of action, to deal with what have been only very rare and infrequent encounters with real trademark bullies, at least in my twenty years of experience. Moreover, there seem to be enough existing legal tools to handle a real trademark bully, namely, one that brings frivolous, bad faith, vexatious or objectively baseless litigation. Rule 11 sanctions apply not only in federal court, but in TTAB proceedings before the USPTO too. In addition, it should not be forgotten that attorneys fees can be and have been awarded in "exceptional" federal district court cases under the Lanham Act, even in favor of a trademark defendant, and even to the tune of $2.5M

Honestly, the closest I think I’ve been to a real "trademark bully" ended up looking much worse, something more along the lines of a trademark monster. And, it appears from the comments to John Welch’s recent post on the TTABlog that many others have seen the same trademark monster running loose.

How would you identify a trademark bully and do you think we need new laws to handle them?

  • http://www.likelihoodofconfusion.com Ron Coleman

    I’ve spent most of the last six years writing, at my blog, about trademark bullying — defined plain and simple, Stephen, as misusing the trademark laws to effectuate what must candidly be acknowledged are not bona fide trademark goals. I recently wrong a whole big schmear on this with even a couple of footnotes in it. If you’ll indulge me two comments with a link in them in one night, here’s a recent favorable notice regarding these thoughts from a blogger I disagree with more often than I agree.
    “Where do you draw the line?” Well, we in the law are charged with drawing it. If it were all bright-line tests, you could have clerks do this work, after all, right?

  • http://www.linkedin.com/pub/bob-cumbow/0/b02/30b Bob Cumbow

    I wouldn’t tie it to intentional harm. I think I’d define the term as meaning a person or company who repeatedly and knowingly asserts trademark rights beyond the scope of protection accorded them by law. That’s fuzzy, of course, and is going to leave a lot of room for debate in some areas. But where such a deliberate over-reacher has reason to know where the line is drawn, by virtue of having lost one or more cases, and yet continues to bring cases of the same kind, that should brand them (so to speak) as trademark bullies. I’m thinking Monster Cable and Leo Stoller. I wonder if participants on this list could name others.

  • http://www.duetsblog.com/steve-baird.html Steve Baird

    Ron, as always, thanks for dropping by and offering your perspective (note I didn’t say two cents, because your sense is far more valuable than that). Definately no bright light rules here, but it seems to me casting the net on a negligence standard is far too wide a net.
    Bob, thanks for sharing your perspective too. It sounds like you agree the standard for being branded a “trademark bully” (to suffer the consequences of whatever that title might bring in some future legislation) should be higher than a mere negligence standard, which was my point, since reasonable minds can differ on what “might be considered” a “reasonable” scope of trademark rights. Your proposed facts sound to me more like a reckless disregard standard, and if so, fair enough, that’s certainly more stringent than a simple negligence standard, but less than a specific intent to harm standard.
    However, I’m still left wondering whether any new legislation is really needed since Rule 11 protects against vexatious, bad faith, and objectively baseless claims — so it seems like that protection would cover your factual scenarios too.
    I tend to agree with others that the “trademark bully” title is overblown, and that those who might fairly wear the title are few and far between.
    In that vein, and in response to your request that folks name others, Bob, I think you have named the poster-children for the mantle. Others following this string might want to check out the comments invited on John Welch’s TTABlog for more named brand owners: http://thettablog.blogspot.com/2010/10/uspto-seeks-comments-on-trademark.html

  • Bob Cumbow

    I’m not persuaded that any new legislation is needed, either–and my sense is that the PTO itself is skeptical as well. But they had this task thrust upon them, so are fielding public comments–apparently to see if any action is necessary beyond what is already provided by law.

  • http://www.linkedin.com/in/paulwreidl Paul Reidl

    I think the “trademark bully” claim is overblown. The fact is that many companies, especially smaller ones, simply do not understand the basics of IP protection — let alone trademark protection. Many think that because they are “small” they are free to do whatever they want because their use of someone else’s IP is too small to cause any harm. Unfortunately, there is no “small guy” exception in he Lanham Act nor should there be.

  • Raghuram Chadalavada

    Hi Stephen! I read your blog on trademark bullying and it has brought out a subject that is not often discussed here in my country. I think it is a serious problem of what some business units think of doing with their trademarks. Not just trademarks but also other intellectual properties like patents. Its a good thing that the USPTO is looking at cases of potential trademark bullying. Here in India although the Courts have decided on certain aspects of this in some judgments they are still not being pursued vigorously.

  • Steve Baird

    Raghuram, thanks for providing your Indian perspective.

  • Raghuram Chadalavada

    Paul While I do agree with you that many companies do not understand IP at all, I would also like to say that there have been cases where there is a genuine case of some big businesses using their IP as a source of cornering smaller businesses especially if both of them do business in the same field. This often happens when one company that has established itself in the market tries to subject others into giving up their business.
    Recently I dealt with a case where two magazines publishing stories and materials from traditional and cultural heritage of India were involved in a bitter dispute over trademark and copyright, while the company which was present in the market for more than 60 years tried to stop a smaller company, which was also publishing similar literature, by stating that only the former had the right to publish such stories in India. The company while making such false claims ignored the fact that no one has a right to claim exclusive right over the cultural heritage of the country. As regards similarity of the trademarks the larger company tried to make some vague comparisons which do not stand the test of infringement.