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Does Size Matter, When Identifying a “Trademark Bully”?

Posted in Counterfeits, Infringement, Law Suits, Trademark Bullying, Trademarks

Who says that being a large corporate trademark owner is one of the prerequisites to earning the emotionally-charged, pejorative, and ill-defined label “trademark bully“?

Well, the original directive to the USPTO appears to assume that “trademark bullying” is a one-way street, disfavoring only large corporate trademark owners, and ignoring the possibility that individuals and small businesses are equally capable of deserving scrutiny for their abuses of the trademark system, by originally focusing on “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.”

Interestingly and easily overlooked, IPO noted in its January 7, 2011 submission:

[O]n December 9, 2010, the Copyright Cleanup, Clarification, and Corrections Act of 2010 was signed into law, becoming Public Law No: 111-295. It contained a provision removing the “by corporations” language from the Trademark Technical and Conforming Amendments Act of 2010, such that the law now requires the USPTO to examine “(1) 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. . . .”

Indeed, for some reason, even the USPTO’s most recent restatement of the directive, here, fails to note what IPO indicated Congress has deleted from the directive.

In addition, IPO also commented that large size isn’t necessarily a good predictor of bad behavior:

“In addition, the pejorative and emotionally charged term “bullies” suggests that the trademark owner in question is a large organization that is using its greater size and economic power to unjustly “push around” a smaller organization or individual. In the experience of IPO members, this is rare, and most large organizations take action in cases upon careful reflection of the facts and development of a strong business case analysis and justification for the litigation expense.

Indeed, several IPO members noted a trend towards more aggressive assertion and defense of trademark claims by individuals and small organizations, particularly where they represent themselves or have obtained legal representation on a contingency basis.”

This all leaves me wondering whether IPO had in mind, at least as one example of this apparent role-reversal, a recent trademark dispute between 3M (an IPO member) and a pro se individual defendant named Pradeep Mohan, wherein Mr. Mohan was found liable for willful trademark infringement of 3M’s well-known Littmann stethescope brand and mark, operating an “unethical” Internet business out of his Santa Cruz residence.

Susan Feyder of the Star Tribune reported on 3M’s win back in December, and the decision is here.

A couple of weeks ago the U.S. District Court for the District of Minnesota (The Honorable Ann D. Montgomery) ordered Mohan to pay and granted to 3M $838,000.00 as reasonable attorneys fees under the exceptional case provision of the Lanham Act, reducing 3M’s original request of $942,063.48 by $104,063.48. A pdf of Judge Montgomery’s January 19, 2011Order is here.

Any bets on whether 3M actually banks any of this award?

And, what do you think about size, does it matter? In other words, are small businesses and individuals also capable of earning the “trademark bully” label, what ever that may mean?

  • Scott Smith

    Since a bully is someone who “hurts, persecutes, or intimidates weaker people,” then obviously a small business by definition can’t be a trademark “bully”! It’s an absurd proposition. A small business may be able to frustrate a larger business, but it certainly can’t bully a large business. I dare anyone who disagrees to try to prove me wrong by naming a single large business that was bankrupted by a small “trademark bully.” Any takers? I didn’t think so. Unfortunately, I know of 100s, if not 1000s, of small businesses intimidated or ruined by a trademark bully. It’s simply amazing how attorneys can turn even the most straight forward concept totally upside down. Trademark bullies are probably doing everything they can to make sure the term “trademark bully” doesn’t make it into federal law as they were able to do with “cybersquatter,” the oft-abused term that large trademark holders turned into the Anticybersquatting Consumer Protection Act, and regularly use to mischaracterize small businesses and individuals who they want to seriously intimidate and swiftly defeat.

  • Scott,
    This is a topic that can draw out great emotion on both sides of the question, I get that, but I’m more interested in the conduct behind the labels, and it seems to me, if we are going to have an intelligent and helpful discussion about abuses of the trademark system, I’ll have to say, I’m open to the possibility that there can be abuses of the system going in both directions.
    At least from an outsider’s perspective, it sure seems to me that Mr. Mohan gamed the system and cost 3M a great deal of unnecessary time, effort, distraction, and expense — and on the other side, all it appeared to cost Mr. Mohan was his time since he represented himself without legal counsel — I’m assuming he will never satisfy the judgment.
    Did Mohan’s actions put 3M at risk of bankruptcy? Obviously not, but neither do most trademark enforcement efforts since ceasing the objectionable use is almost always sufficient to end the dispute, at least when the party objecting is focused on the question of likelihood of confusion.
    As I have written previously, trademark bullying to one is legitimate enforcement of rights to another. When a trademark owner really brings objectively baseless claims or brings them in bad faith, we have existing protections in place for those defendants — its a matter of being able to line up the right team to effectively utilize them.
    Thanks for sharing your thoughts and perspective and please keep us posted on any developments in this topic of discussion.

  • Carl Vennitti

    Steve,
    I am one of the few, if not only, that has taken a large corporation to task. The Opposer in my case has just recently initiated two more Oppositions against small regional companies for 2d(a) claims. Their pattern of behavior unquestionably points to monopolization. When an Applicant follows the rules, law, and regulations, then passes the Examining Attorney, only to then face an Opposition, something is wrong with the system. I submitted ideas for consideration before the previous deadline for requests for the small business study. Hopefully they will get some consideration.
    When you read rants from me, or from others that have been damaged by this behaviour, understand that our livlihoods have been affected. We do have jaded persectives.
    In reference to Scott’s comments above, yes there are hundreds, if not thousands of us out here. The system has to change to eliminate the costly Opposition proceedings. We all have sad stories to tell, but very few of us started out to intentionally attack another company’s Marks. Remember also that most of the large companies engaged in ‘defending’ their Marks have an in-house legal department, or resources to obtain aggresive defenses.
    As a lawyer, you know that pro se representation is not a good path to follow, but there are many who no longer have the resources to continue on any other way. The ‘bullying’ law in Intellectual Property needs to have some teeth so that there is some concerns to be considered by an Opposer. Without that, the whole idea behind the law was just fluff.

  • Scott Smith

    Hi Steve, here is my reply, not that it will be well received or at all change your mind. :)
    THIS IS A TOPIC THAT CAN DRAW OUT GREAT EMOTION ON BOTH SIDES OF THE QUESTION:
    Can you cite any examples of great emotion from trademark bullies or their attorneys? Didn’t think so. The great emotion comes from the actual victims, small business owners, not trademark bullies or attorneys who profit off of the conduct of trademark bullies.
    I’M MORE INTERESTED IN THE CONDUCT BEHIND THE LABELS:
    If so, then you should be seeking comment from small business owners with firsthand experience dealing with a trademark bully, not other attorneys. Probably 99% of these cases end very quickly, w/out the small business having a chance to present evidence or challenge the trademark bullies typically trumped-up claims. Not only that, most small businesses are so unable to fight back, they never hire an attorney, so most attorneys don’t have much firsthand experience defending a small business attacked by a trademark bully. I was recently told by another small business attacked by an out of control trademark bully, that her short 3-month battle cost a whopping $300,000 in legal fees. And her case settled only so quickly because the trademark bully realized she could at least mount a defense, unlike their other victims.
    DID MOHAN’S ACTIONS PUT 3M AT RISK OF BANKRUPTCY?
    Your 3M example is desperate and totally baseless, and has absolutely nothing to do with bullying. It’s nothing more than a red herring. 3M execs or attys certainly never feared Mohan, or stayed up nights wondering how they were going to pay their bills because of Mohan, or feared that their life’s work could be ruined if they lost the battle. The fact that Mohan fought pro se makes 3M’s case less credible to me. Large co’s are regularly caught infringing a small co’s rights, but frequently escape penalty because the small company can’t afford the costs or risks of litigation. If 3M and Mohan had battled with comparable resources, then the case would be less suspect to me. But since 3M admits spending nearly $1,000,000 in legal fees, it’s hardly surprising that 3M was victorious. I’m not claiming Mohan was innocent, but obviously his pro se case was no match for 3M’s huge resource advantage. If 3M’s case was so strong, how come they had to spend nearly $1 million to win? Would they have been able to win if they didn’t spend such a huge sum of money on attys’ fees? What if 3M had been forced to fight pro se and Mohan had been able to spend $1 million in attys’ fees? Trademark bullies and their attys love to downplay their dramatic economic advantages. But we all know that the more money you have, the better and more attorneys you can hire. A fact that $800/hr attys sell to get deep-pocketed clients. So obviously, the less money you have, the less your chances are of success. Do you even know what Mohan’s revenues were, or how puny 3M’s legal fees were compared to their revenues?
    “Gaming” the system is not the same as being a trademark bully. Once again you’re being loosey goosey with your arguments. The issue is BULLYING, not gaming the system.
    AS I HAVE WRITTEN PREVIOUSLY, TRADEMARK BULLYING TO ONE IS LEGITIMATE ENFORCEMENT OF RIGHTS TO ANOTHER:
    Are you joking? Your softness/bias for trademark bullies is again exposed. That’s akin to saying, “schoolyard bullying to one is legitimate taking of lunch money to another.” Legitimate enforcement of rights is polar opposite to trademark bullying. But you obviously don’t want to concede that fact. Is that because the big money for trademark attorneys comes from representing trademark bullies, and not small businesses? I believe so. The facts are just too overwhelming for me to believe otherwise. Look how swiftly and strongly you and other attys react when someone dare sticks up for small businesses or attacks trademark bullies. Your bias makes me need to ask, what percentage of your revenues come from small businesses, and what victories have you won for small businesses? As is widely-known, sometimes you just need to follow the money to figure out why someone seems so vested in a certain outcome or position. “It is difficult to get a man to understand something when his salary depends on his not understanding it.” Upton Sinclair, Author, Investigative Journalist, Socialist
    WHEN A TRADEMARK OWNER REALLY BRINGS OBJECTIVELY BASELESS CLAIMS OR BRINGS THEM IN BAD FAITH, WE HAVE EXISTING PROTECTIONS IN PLACE FOR THOSE DEFENDANTS — ITS A MATTER OF BEING ABLE TO LINE UP THE RIGHT TEAM TO EFFECTIVELY UTILIZE THEM.:
    Sorry to again be so direct and critical, but this statement displays a dangerous level of bias and/or ignorance. Do you really claim to be totally unaware of the huge sums of time and money it takes to pursue these so-called “existing protections”? What protections are you so vaguely referring to, and what’s the typical amount of time and money necessary to enforce them? As shown above, it can cost 100s of thousands of dollars just to begin fighting even a frivolous trademark battle. And as you must be aware, there are so many “outs,” that it’s next to impossible for a small business to recover any of their legal fees and expenses. Can you cite any good examples of a court ordering a trademark bully to compensate a small business for its legal fees and expenses? Say for example a trademark bully attacks a small business based on what it is obviously a generic term, and the small business actually has the time and money to prove the term is generic at trial. What then? As you know, though the trademark bully may lose their trademark rights, but besides getting out from under the attack, the “victorious” small business gets nothing but a court ruling saying what they already knew.
    As you also know, the trademark system doesn’t just allow trademark bullying to go unpunished, it actually rewards it. Which is exactly why attys repeatedly tell trademark owners that they must aggressively pursue their trademark claims (which of course leads to more conflicts and legal fees for attys). How else would trademark bullies such as Intel have so much success with its efforts to monopolize a word as common and generic as “inside”, or Entrepreneur magazine have so much success with its efforts to monopolize a word as common and generic as “entrepreneur”? Before you respond, think about what your response would be if someone dare claimed to own the words “lawyer” or “attorney”, and was harassing and suing small law firms that used those words!

  • Scott Smith

    Steve, forgot to ask you another important question. What could you afford to do if someone tried to bully you out of your house, and attorneys quoted you $500,000 to fight back, but also told you that if you lost you could lose everything, and even if you won, you probably wouldn’t be awarded any of your attorney’s fees or costs? Would you really try to argue then that “when someone really brings objectively baseless claims against a homeowner, or brings them in bad faith, we have existing protections in place for homeowners — it’s a matter of being able to line up the right team to effectively utilize them”? And remember, as the shareholder of a law firm, you likely “earn” as much, if not more, than a significant percentage of small business owners!

  • I don’t think the size of the bully matters so much as whether the alleged bully engages in bullying. Generally that means (to me, at least) serially picking on parties the bully’s own size or smaller in an abusive way. I guess if size matters at all, it is the relative size of the targets of the bully, because the harm caused is by required multiple parties to either spend unnecessary legal costs defending their marks or having to make the choice to give up their valid rights because the expense of defending them is too great. So I question whether it’s really bullying when a serial trademark litigant consistently picks on bigger targets. “Mosquitoing,” maybe? For example, how would trademark practitioners identify the litigation/enforcement tactics of Leo Stoller? Is that considered bullying or something else? I would not call it bullying in any traditional sense.

  • This is a wonderful discussion. I thank all for you for participating. I suggest that the most notorious trademark bully of all was probably Leo Stoller. His exploits are well documented at, among other places, the ttablog(R) administered by John Welch.
    http://thettablog.blogspot.com/2006/07/ttab-sanctions-leo-stoller-vacates-all.html
    Stoller would obtain extensions of time to oppose (in March of 2006 he filed 717 of them, and over 1800 within a one year period) and then write to the applicants “suggesting” they take a license from him or he would oppose their applications. His letter said that he was prepared to act in a way that would cost the applicant thousands in legal fees and many months of delay. His alleged trademark rights seemed to flow from a website where he had hundreds of “marks” available for license. Many of his properties appeared to be images on t-shirts, or the like. I believe he also sold some of these items on-line. The USPTO sanctioned him and, in an order dated July 14, 2006, banned him for two years from filing any more extension of time requests. The USPTO also permanently banned him from acting without an attorney in any future filings he might make. He was small, but he used the system to try and secure payments under various threats. In my book he exhibited bad behavior and tried to bully people.

  • Carl Vennitti

    It’s very easy to see that Scott is a victim and not an attorney. This we share in common. About mid-way through my ordeal ( 7 years and counting) I actually went to Kaplan University Online to see if I qualified for a law degree based on my life experience (at the time, three years into the civil litigation portion of my trademark battle). Heck, I would have been happy just getting a certificate as a paralegal apprentice.
    The problem is that we have to live in and deal with the ‘legal system’. Most of us that have been affected by the law still daydream about the long defunct ‘justice system’. Using the word ‘justice’ alone evokes emotions from the common person. And legal representation varies by degrees as well. Although I was fortunate enough not to tackle my case pro se, in the civil portion of my case my counsel was continually intimidated by the entourage of Plaintifs counsel. Even to the point where Plaintif ammended the complaint to eliminate a trial by jury of my peers. Plaintif knew they couldn’t win in that scenario.
    But they still screwed up which is why my case is still active.
    I have to take you to task and agree with Scott about the controls that are in place to compensate for malicious activity by a so-called trademark bully. There are none. Realistically. If you are guity of theft, bodily harm or harrassment, there are set parameters in the ‘legal system’ for compensation. As it stands now, only the benevolence of the offender is usually on the table as a settlement. My case has cost me $800k in legal fees alone and counting.
    My point is: the Trademark Office is in need of massive changes in the trademark process. If an Examining Attorney grants the Mark to be issued, then so be it. The Examining Attorney should have enough tools available to make a determination as to whether a proposed Mark is in jeopardy of infringement. The TTAB should be reviewing allegations of one bona fide Mark infringing on another bona fide Mark. It would increase the workload for ex parte appeals, but, it would save businesses the ridiculous expenses involved with defending a Mark which has been approved by an Examining Attorney.

  • Carl Vennitti

    Stoller was/is a criminal. Now behind bars. Sorry Jack, but he is a poor example. There can’t be more than a couple of those type of idiots in all of trademark history. Read his blog. As you do, you have to keep wiping the foam off of your screen. You guys (attorneys) need to come up with something more substantive.

  • Scott Smith

    Stoller was a little guy who was able to exploit the USPTO’s flawed and easy to abuse system to create tons of havoc for lots of companies. The amount of problems such a nobody could cause highlights how vulnerable the USPTO is, and what a serious problem trademark bullies have become.
    Stoller was so barely penalized despite all the problems he caused, that his story is much more of an encouragement to trademark bullies than a deterrent. That’s why it’s so ridiculous when attorneys make unsubstantiated claims that there are remedies for small businesses trying to fight off trademark bullies (not surprisingly, these so-called remedies are rarely tied to actual cases showing that they worked for a small business fighting a trademark bully).
    I understand why people are captivated by Stoller. He is definitely a loose cannon. But unlike deep-pocketed trademark bullies, I don’t know that Stoller was targeting or trying to ruin smaller companies, or that he was a business/job killer. And unlike deep-pocketed trademark bullies, Stoller wasn’t willing and able to spend millions to defeat and ruin someone.
    Personally, I’m far more worried about the human toll and economic damage being caused by deep-pocketed trademark bullies that are running amok and being defended and aided by fee-seeking attorneys. There is obviously something wrong if a small business owner like Carl Vennitti, who also posted comments, has to spend $800,000 (and counting) fighting for a trademark the USPTO already reviewed and approved for registration and use. Think of what investments Carl could have made in his business with that kind of money, investments that would have led to even more jobs and taxes paid.
    But a lot of attorneys see Carl’s story and think, “Damn, how can I land a client like that who can pay that much in legal fees? And if Carl’s small business could spend that much, think how much a large business could spend? One big, litigious client like that could not only cover my law school loans, they could also pay for my kids’ law school tuition!”

  • john troll

    Been there. Had to fight senior management. Trademark bullying is, almost without exception, a disease of large, otherwise well respeced brand owners. And citing any reported case is irrelevant. Because bullying involves heavy handed tactics all employed to get others to change their behavior BEFORE any real legal exchange take place.
    Want some indirect evidence? The number of reported trademark cases has dropped each year for the last several years, while the number of cases filed goes up and up.
    A mindset often arises inside large corporations. Everyone starts to see the entire world through the perspective of their compaany and its products or services. When I worked at Harley-Davidson, I lost count of the times when I had to explain that the then famous SPORTSER modem was not an attack on SPORTSTER motorcycles.
    Take this mindset add to it the egos of managers used to getting their own way, plus the self interest of outside lawyers and inside lawyers trying to prove that they add value. What do you get?
    Overreaching. Legal claims that would not withstand the laugh test if they ever were put before a judge. And an attitude that is either dismissive of small companies as riff raff or sleazy and thus normal rules of corporate morality need not apply