– Draeke Weseman, Weseman Law Office, PLLC

Intellectual property enforcement continues to make news, and new solutions to curb abusive enforcement – i.e. trademark bullying, patent trolling, and copyright trolling – are being proposed regularly. Central to these solutions is the idea of a “fast-lane” that kicks bad claims to the curb before the bullied or trolled party has incurred significant legal costs.   For example, in copyright infringement cases, a motion for judgment on the pleadings may succeed very early in the process if fair use is obvious. The ability to end frivolous litigation early is critical to a balanced intellectual property system.

Although I haven’t seen it discussed much, one possible means for putting an early end to frivolous trademark litigation is for the bullied party to pursue dismissal on the grounds that the trademark bully has not met the required pleading standard of “plausibility” set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) and extended in Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (2009). (For the non-lawyers reading DuetsBlog, “pleading standard” refers to the threshold content that is required in a complaint so that a plaintiff can have access to the court). My opinion is that claims that deserve the trademark bullying label are not likely to meet the Supreme Court’s pleading standard and, therefore, should be dismissible. Early dismissal of bad trademark claims, if more routinely sought and granted, could provide bullied parties with relatively quick and cost-efficient relief and could be another tool in the toolkit for practitioners faced with responding to abusive intellectual property enforcement.

First, a quick summary of the change in pleading standards. From 1957 to 2007, civil litigants followed the “mere notice” pleading standard of Conley v. Gibson, 355 U.S. 41 (1957), wherein the Court held that a complaint need only state a “conceivable” set of facts to support its legal claims. That all changed in 2007, when, in Bell Atlantic Corp. v. Twombly, the Court replaced that standard with a stricter “plausibility” standard: a complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Because the Twombly case involved a specific set of facts involving allegations of anti-competitive behavior, the courts were confused about whether Twombly’s rule should be extended to all civil litigation. So, in 2009, in Ashcroft v. Iqbal, the Supreme Court confirmed that the new, stricter pleading standard of “plausibility” applied to all civil litigation.

According to the Supreme Court, in order to state a claim that is “plausible on its face,” a plaintiff must string together facts that amount to more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Legal conclusions can provide the framework for a complaint, but are insufficient on their own because legal conclusions are not entitled to an assumption of truth. Asking for plausible grounds “calls for enough fact to raise a reasonable expectation that discovery will reveal evidence” of unlawful conduct.

So, do trademark bullies bring plausible claims? In my view, no. And I think this view is often echoed in the media coverage of trademark bullying cases, where we see the sentiment expressed time and time again that “there’s no way anybody is confused about X and Y.” Those of us following this issue can all remember Vermont Governor Peter Shumlin’s public message to Chick-fil-A: “If you think that Vermonter’s don’t understand the difference between kale and a chicken sandwich, we invite you to Vermont and we’ll give you a lesson about the difference between kale and a chicken. There are some very distinct features . . . ” This seems to me to be a layman’s way of saying that Chick-fil-A’s claim of trademark infringement was just not plausible on its face.

Like Chick-fil-A in the Eat More Kale dispute, trademark bullies regularly and aggressively claim likelihood of confusion without actually alleging enough factual matter to make that claim plausible, rather than merely conceivable. Trademark bullies often claim a likelihood of confusion based entirely on the similarity of the marks, while ignoring the other elements necessary to establish trademark infringement – strength of the mark, relatedness of the goods, overlapping trade channels, bad faith intent, etc. In doing so, trademark bullies might show a conceivable claim – the marks are the same, so conceivably there could be confusion – but they lack the extra stuff necessary after Twombly to get over the hurdle of plausibility. In other words, the claim isn’t plausible because despite similarities in the marks, the mark is so weak or the goods so unrelated that there is not “a reasonable expectation that discovery will reveal evidence” of trademark infringement. I think if more of the bad trademark claims we see were actually held up to this standard, more of these claims would fail.

Moreover, courts have ample discretion to decide whether a claim is plausible, and thereby to decide whether to subject a bullied party to the burden of discovery. In Iqbal, the Supreme Court held that “[u]ltimately, determining plausibility is a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Courts can look at the success or failure of prior trademark claims and rely on their own common sense about whether there really is any unlawful conduct that will be discovered. This might be a difficult subjective decision, but judges should not shy away from that responsibility.

As a matter of public policy, upholding the plausibility standard is important. Comments from the public, as part of the USPTO’s investigation into trademark litigation tactics in 2011, revealed the following views:

Aggressive tactics used by overreachers presents a problem for the entire intellectual property community by threatening legitimate activities and clogging the legal system with invalid claims.

[D]iscovery and deposition processes were too costly for many small businesses and provided a means for a party to thwart progress in a case and to drain resources from an adversary. . . .

[S]mall companies and individuals are placed in a difficult position where surrender of valid trademarks that are being lawfully used is the only rational financially-feasible option available.

It seems to me that one way to reduce the impact of frivolous trademark litigation is to demand that trademark plaintiffs actually meet the plausibility standard set forth in Twombly. Trademark practitioners should challenge trademark bullies under Twombly and expose the implausibility of claims made by trademark bullies.