Search results for: trademark bullying

–Jason Voiovich

Last week, we saw the latest installment in the “trademark bullying” saga. But this time was different. Instead of lawyers fighting amongst themselves, DuetsBlog brought out the big gun: Seth Godin. You can read the entire piece here. I like Seth Godin, and so do lots of other people (hence, the “big gun”). I read the comments (over 30 from my count). It seems to make people feel better to have someone with credibility give voice to their frustration.

I’m not against feeling better; mental health is a big deal. But as I read situation after situation, I am struck by how cases of trademark bullying almost always turn out: The small business loses.

Perhaps they don’t lose in the legal sense, but they lose in nearly every sense that matters to a small business: Time, Energy, Money, Resources, and Attention. Every moment addressing a trademark issue is a moment not invested in their business. Small businesses do not have any of those assets to spare. Large organizations do. They have legal teams that shield their workers from the ongoing drama. They have marketing budgets to drown out negative publicity. If all else fails, they have the resources to outlast you. In over 10 years of public attention, is it any wonder their behavior hasn’t changed?

Public shaming feels good, but it is not working.

It’s time to act.

To act, small business owners need reliable information about their risks. They need that information in advance of a trademark filing, and even in advance of first usage – after-the-fact litigation or advertising insurance don’t solve the problem. And finally, they need accessible and affordable information – calling your lawyer before each decision is not realistic.

In other words, small business owners need an ounce of (affordable) prevention, not a pound of cure.

Here’s my proposal.

To explain it, I am going to adapt Guy Kawasaki’s new business pitch format. At the end, I am going to ask you to invest. Let’s go.

Define the problem.

Trademark owners rightfully defend what they’ve built. However, when they overstep, there is no downside for their behavior. Even if they “lose” in court, they don’t really lose. They create a “chilling effect” for future conflicts. Additionally, they can restrict the distraction in their organization to only their legal team (who, to them, this is not a distraction). By contrast, there is plenty of downside for the small business owner. An unfavorable result in a lawsuit can put a small company out of business. But even if you win, you lose. Distractions are killers.

How does your product solve that problem?

Prevention is the best cure. Imagine a “Trademark Risk Score” much like a credit score. At “1” might be a name you completely invent from random characters. At “100” might be naming your tech company “Big Apple Computers” – an algorithm automatically scores everything in between.

Underlying magic or technology.

Building the algorithm seems easy, but it is not. Factors could include the number of existing trademarks, the size of the companies with those marks, matches in categories of use, length of trademark ownership, recent court decisions or filings, etc. But those factors don’t make an algorithm any more than ingredients don’t make a recipe. The “magic” here is using professional attorneys to “train” the algorithm and improve it.

Business model.

Small business owners could buy access to the system as a one-time purchase (like a “risk check”) or as a subscription (like a “regular checkup”). Accelerators and angels offer this subscription as a service to their startups. I could even see entrepreneurial publications (cough, cough) providing this to their subscribers as an add-on. Lawyers could advertise their services. You get the idea.

Go-To-Market plan.

Aggregators of small businesses are key to the strategy; reaching them 1:1 is cost prohibitive. Fortunately, there are plenty of accelerators, gig economy supporters (e.g. WeWork), and trademark lawyers in the world.

Competitive advantages.

The biggest competitor to this idea is a data aggregator named Trademarkia. However, their service still relies on you as the small business owner to know what you’re looking for (and I don’t think their search functions or aggregation is all that “smart”). If you’re confused, they offer expensive add-on services ranging in cost up to $10,000. That’s not going to fly for the average small business owner. They need something easier to understand and digest.

In this proposal, you plug in a few details, the algorithm spits out a risk score. Is it perfect? No. Will it protect you? No. But it will give you critical information you need to make an informed decision on next steps based on your risk tolerance.

Management team.

This solution will require three key groups of people – tech (to write the learning algorithm), lawyers (to train it), and marketers (to promote it). I wonder if I know any of those people who might be reading this?

Financial projections.

Based on the 300,000 (or so) new businesses started in the United States each year, and a 20% penetration rate for my TAM, and a $100 subscription price, I calculate about $6 million in annual revenue. Back of the napkin, but it’s a business.

Rollout plan and milestones.

I am putting my money where my mouth is – with hard cash. I am committing publicly to the first $1,000. That’s (obviously) not enough to get started, and there is hardly enough detail in this “proposal” to make a formal investment decision, but perhaps it’s enough to get others interested and begin the conversation.

Hate this idea? Awesome! Use it (copyright free) to come up with your own idea.

Just don’t keep public shaming. That’s not helping anyone.

A few weeks ago, a Mexican restaurant in Fort Collins, Colorado, named “Dam Good Tacos,” agreed to change its name based on a settlement in a trademark dispute with another Mexican restaurant, Torchy’s Tacos.

Torchy’s Tacos owns a federal trademark registration for the mark “DAMN GOOD TACOS” (Reg. No. 4835497) for restaurant services. After learning of the Dam Good Tacos restaurant, Torchy’s filed a complaint in federal court, asserting trademark infringement based on the nearly identical use of its mark, for related restaurant services.

The re-branded name of Dam Good Tacos is now DGT, an acronym for its previous name. Some Coloradans are unhappy with the name change, and Torchy’s is facing some significant backlash on social media for initiating this trademark dispute.

For example, one social media user states that she “kinda hates” Torchy’s for suing DGT, and another stated “shame on Tochy’s” regarding its “frivolous lawsuit,” which makes them “look foolish.”

However, the lawsuit is hardly frivolous. The parties’ marks and restaurant services are nearly identical, and Tochy’s appears to have priority, in addition to all the legal presumptions that come with its federal registration. Also, the parties’ businesses are in the same market, with a Tochy’s Tacos location just a couple miles away from DGT. And before suing, Tochy’s offered DGT financial assistance with a name change, but DGT refused.

Nevertheless, the social media backlash is a reminder that, no matter how strong the case for infringement, trademark “bullying” is a prevalent topic, and it’s important to be cognizant of the potential for negative PR in any enforcement efforts, particularly when there is a significant disparity in the size and resources of the parties, and/or when either party is popular or well-known in a particular market.

There have been several recent examples in this context, where large well-known companies initiated enforcement efforts against smaller parties, but have done so in creative, friendly, and humorous ways, which not only avoided criticism, but also benefited all parties involved, with a supportive public reaction and widespread media coverage.

Two of my favorite, recent examples of this, are the Netflix “Stranger Things” demand letter (we blogged about it here), and Bud Light’s Dilly Dilly demand scroll — which was read aloud by a medieval character at the alleged infringer’s brewery (see our blog post here). Rather than face any backlash or claims of bullying, the reactions to these enforcement efforts were positive, with both companies receiving significant praise, such as “funny,” “cool,” and “super classy.”  That’s quite a feat, as those words are quite rarely applicable to legal demand letters.

What do you think about Torchy’s approach here? Do you have any favorite examples of successful enforcement efforts from a public-relations perspective?

Jason Voiovich, VP, Marketing, Analytics & Research Services, Logic PD

distinctive |disˈtiNGktiv|
adjective
characteristic of one person or thing, and so serving to distinguish it from others: juniper berries give gin its distinctive flavor.
– New Oxford American Dictionary

I hadn’t heard of kombucha, much less Certified Organic craft kombucha. (Somewhere, a hipster is crying for me.) I had to look it up. To the rest of you who are as new to this as I am, here’s what Wikipedia has to say:

“Kombucha refers to any of a variety of fermented, lightly effervescent sweetened black or green tea drinks that are commonly used as functional beverages for their unsubstantiated health benefits.”

If the last part of that statement seems a little like a backhanded compliment, you should see the Revision History on this Wikipedia article!

But I digress. I’m certainly not here to discuss the merits of drinking kombucha. However, as a matter of market positioning, the Barefoot brand of Certified Organic craft kombucha follows a familiar organic marketing playbook.

  • Play the healthful angle. Anecdotal evidence is just fine for this market. That said, Barefoot Bucha is much more careful than most others I see regarding the “unsubstantiated claims” issue.
  • Play up the “organic cred” of the founder or founders. In this case, Barefoot is the brainchild of husband-and-wife team Ethan and Kate Zuckerman.
  • Play the “mission” card. Barefoot claims to have saved over 350,000 bottles by insisting their customer refill versus bottle and ship. It’s an interesting business model and the logical foundation of their “Barefoot” brand name. The name implies a smaller “footprint” on the global ecosystem.

It’s that last part that gets them in trouble. Specifically, wine giant Ernest and Julio Gallo markets a Barefoot Wine. I’ll bet you’ve heard of those guys.

From a trademark perspective, is it a problem that a brand of organic fermented tea and a brand of fermented grape drink share a name? Gallo seems to think so, and has started the nastygram process.

To get a better sense of the legal issues involved, I recommend reading Lisa Provence’s C-VILLE Weekly column on the subject. Our own blogger extraordinaire Steve Baird gets extensive quote time in it. It’s a good read, a little over my head in a number of places, but it seems to come down to this: One person’s infringement is another person’s fair use. I’m certainly not qualified to offer an opinion on the legal merits. But the branding; that’s another story.

The trademark bullying issue is a red herring. Barefoot, as a brand name concept, sucks.

The “barefoot” concept relates to how the product is distributed and not what it is. That’s not necessarily a poor strategy if it wasn’t so easy to duplicate. There’s very little unique about their approach. In fact, asking your customers to refill containers is pretty common in the organic foods industry.

But more than an approach easily duplicated, the brand name itself contains a fatal flaw. Common words such as “barefoot” (by definition) are not distinctive. Before you trot out “Apple”, “Target” or “Delta” as counter examples to prove me wrong, consider that these brands are only seen as distinctive after they’ve spent literally billions of dollars in advertising over the course of multiple decades.

For a broader perspective, take a look at Interbrand’s ranking of the world’s top 100 brands. How many “common words” do you see? I’ll save you the trouble: No matter how you slice it, it’s always less than 10%.

As a smaller company, you simply can’t afford want to play those odds.

Using a common word simply isn’t memorable, and you need all the help you can get. Your objective with a brand name must be to choose one that your target audience will associate with nothing else.

I’m sorry, while it is certainly vitally important from a societal perspective, “making a smaller impact on the environment” is not exactly a unique value proposition at your average Whole Foods. It’s table stakes. It’s expected. It’s forgettable.

So here’s the situation: Barefoot Bucha’s small (but motivated!) group of fans and followers have taken social media to attempt to shame Gallo into backing down. Barefoot Bucha has righteousness on their side. Gallo has millions of dollars (and time) on theirs. The bad news for Barefoot Bucha? While one can certainly point to a few cases where public shaming has worked against a trademark bully, the vast majority of cases don’t turn out that way.

If it were me, I’d take advantage of the attention Barefoot Bucha is getting right now to kick start a rebranding effort.

P.S. Back in 2012, Sara Rufener and her brand “Live the Beauty of Being Strong” got the virtually the same smackdown from then-seemingly-good-guy Lance Armstrong and his Livestrong legal team. At that time, we wrote about how to use corporate judo to defeat the effort. But alas, he seems to have defeated himself. If you’re interested, have a read here.

Sophisticated trademark owners recognize that their trademark rights are dynamic — even if their trademarks aren’t famous for purposes of dilution — they can grow or shrink over time, depending on the magnitude of their own use and their response to third party violations.

It is no wonder then that trademark owners are prepared to expend significant resources, at least to maintain the scope of their initial rights, to protect the value of an important intellectual property asset, and in doing so, they act with the law of trademarks on their side. Importantly, a proper balancing of the many likelihood of confusion factors determines the scope of rights for marks that are not famous (for purposes of dilution protection).

So, if the original scope of rights associated with a particular non-famous mark is represented by the black-colored concentric circles on the target, and the bullet holes represent third party unauthorized uses of confusingly similar marks, and if the trademark owner takes no action against them, then over time, the trademark owner’s scope of rights easily can shrink down to the center of the bullseye, where the trademark owner is only able to control identical marks in connection with directly competing goods.

Professor Ken Port at the William Mitchell College of Law has been exploring the “trademark bullying” issue for some time, he has graciously offered some comments to our writing on the topic here and here, and later this week, he will join Minnesota Representative Joyce Peppin and others to discuss Trademark Bullies – A Problem in Need of a Cure? at the Midwest IP Institute in Minneapolis, Minnesota.

Of course, one of the challenges with so-called “trademark bulling” is the need for a workable definition, and this must precede any intelligent dialogue about what to do with conduct that fits the definition. Although we have written extensively about many aspects of the topic, my views on a proper definition have not changed much since my first post on this topic three years ago: The Mark of a Real Trademark Bully. Yet, the effort to develop an appropriate definition continues.

Earlier this month, Professor Port presented a seminar at William Mitchell where he offered this definition:

“Trademark Bullying occurs when there is evidence that a trademark holder asserts a non-famous mark against a non-competing entity on or in connection with goods or services into which the plaintiff has no reasonable expectation of expanding.”

One significant concern with this definition is that it applies a pejorative label — and presumably adverse consequences to those who wear the label — to conduct that is likely within the scope of rights enjoyed by a trademark owner under current law.

The law fully contemplates a trademark owner asserting rights against non-competing entities and there is no requirement — in showing likelihood of confusion — that the trademark owner must have a reasonable expectation of expanding their offerings to the point where they will compete. This definition, it seems to me, places determinative weight on the “bridge the gap” factor that only some courts consider in the likelihood of confusion balance.

So, as I read it, this definition, not only snares completely legitimate activity by a trademark owner, but it also seeks to rewrite the law of likelihood of confusion in a way that dramatically reduces the scope of rights held by existing trademark owners.

What do you think?

This past week I’ve been pondering a question of great importance: When might a straitjacket double as a life vest? The answer actually arrived last Monday during INTA’s “The Ethics of Trademark Bullying” panel discussion at the 135th Annual Meeting in Dallas, Texas.

In so many words, our good friend and wise guy Ron Coleman, over at Likelihood of Confusion, described the “trademark bullying” panel as, let’s say, rather muzzled. While I agree that one had to strain to hear any insights, perspectives, or opinions, I prefer the more comprehensive straitjacket metaphor (Hannibal Lecter style) over the mere muzzle, because it obstructs well beyond simple vocal chord vibrations and stills the wildest of “dangerous” body language too, even the likes of this little guy’s gyrations. Yet, Ron critiqued the audible portion of the panel discussion and explained the unfortunate situation this way:

“Similarly, want to talk about trademark bullying?  Briefly mention two or three examples (oddly enough, using “the same examples you might find mentioned in this article) and conclude that they’re not really bullying (kind of like in that article, actually!) (and no — don’t cite the article!  Duh!).  Apologize for not discussing any actual examples of trademark bullying because doing so might offend a the-INTA member company, or, aw shucks, one of my clients, wouldn’t you know? (This actually happened – again resolving, definitively, my original dumb question.)  Then come around to the edgy, original conclusion that maybe we shouldn’t write dumb cease and desist letters any more — you know, what with these crazy kids and their Intertubes and all.”

“It’s easy to crack wise, but the reason, Mr. Wiseguy Blogger, those guys are up there on the panel and you are not is that the people on the panel understand what to say and when to say it.  And when not to say it.”

“And, not to get to all Kurt Gödel about this, but you.  Do.  Not.”

A non-attorney friend of mine recently described how he plans to provide valuable insights and information on his forthcoming blog, but he also “will certainly poke the bear.” The “bear” in his non-legal industry, that is, not a cute, cuddly teddy bear. So, if INTA is an industry bear, Ron, consider it poked (more than a few times). Well, I suppose, it’s not my first time either.

Anyway, back to the problems with INTA’s “trademark bullying” panel discussion (after seeing IPKat’s similar perspective, does that make this post the “tipping point” on the subject?).

In short, Caveat Emptor (“let the buyer beware”) was the word of the hour.

There were so many caveats offered by the moderator at the outset, I lost track of them, except this one: To avoid offending any trademark owners or their counsel, the panel would limit themselves to “just the facts,” no opinions or “judgments” about whether any “trademark bullying” lines have been crossed.

Call me crazy, but I’m thinking more than a few trademark types pay four figures to register for the Annual Meeting, expecting more than legal facts (facts without analysis or opinions can more easily be found on most Big-law firm websites and blogs) — instead, hoping for some valuable insights, perspectives, and well, opinions on the subject at hand, but by all means, answer some questions (or, at least ask some questions of the audience).

Perhaps the juxtaposition of these images says it all:

So, if some other form of “time” actually had “permitted” and the panelists actually had been inclined or “permitted” to share their opinions or “judgments” about the examples or topic, what might you have asked them about trademark bullying?

Last, while we’re on the subject of caveats, INTA might be wise not to forget this one: Caveat venditor (“let the seller beware”). If INTA doesn’t remove the straitjackets from their speakers and also find qualified speakers who won’t self-impose them, the number of trademark types filling nearby hotel rooms to attend the UN-TA may begin to outnumber those paying four figures to register for the official INTA event.

And, recognizing the heavy dose of irony contained in the coming link, when will “ambush marketing” begin to target INTA events?

It’s such a slippery slope.

Seth Godin is someone we follow closely here on DuetsBlog, and he has just weighed in on the “trademark bullying” topic.

We haven’t always agreed with his trademark advice, especially his misapprehension of the benefits of federal registration. But, it’s hard to argue with this conclusion: “When a brand becomes a bully, it loses something vital.”

The problem, of course, is that it begs the question of who deserves to wear the pejorative “trademark bully” mantle.

I’ve argued against the social media shame-wagon approach to applying the label, against a quantitative approach, and the size of the actor isn’t determinative either; far more instructive is a qualitative analysis of the alleged examples of overreaching, and let’s not forget how important tone can be too.

Godin’s target is the International Olympic Committee (IOC), for violating the law of common sense, in pursuing “knitters and improv comedians and authors of children’s books, dry cleaners, and Facebook users“.

I’ll admit I don’t know the facts of any of these trademark enforcement examples (and the links didn’t spell them out), so undertaking a qualitative analysis of them would be difficult, but focusing purely on “common sense,” only seems to encourage that opinions and decisions be made in a vacuum, seems to assume away the need for any knowledge or understanding of the applicable laws, and also seems a lot like focusing on what is “reasonable” (an inherent problem in the definition):

“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.”

Of course, the OLYMPICS brand sits in a very unique position as compared to most trademark owners because Congress granted very special protection in the word OLYMPIC to the U.S. Olympic Committee, see  Title 36 of the U.S. Code in Section 220506.

I also agree with Seth Godin’s words: “You can’t build a brand by trying to sue anyone who chooses to talk about you.” But, I guess I’m not seeing that here — at least, in the examples given. So, talk is fine, but operating a business under a name using the word Olympic is something quite different.

So, what do you think about the IOC and the applicability of the “trademark bully” label?

Minnesota State Representative Joyce Peppin, is convinced that “trademark bullying” is a problem and that it requires a brand new law in Minnesota to properly deal with it.

Representative Peppin apparently is a law student at William Mitchell College of Law, and she has teamed up with other students and William Mitchell law faculty to write and introduce into the Minnesota State House, a bill entitled the “Small Business Trademark Protection Act” (H.F. 2996).

The body of the proposed bill makes no reference to “small business,” nor does it attempt to define “small business,” but it does purport to define “trademark bullying” this way:

 “[T]he practice of a trademark holder using litigation tactics in an attempt to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark holder.”

As presently written, the proposed Minnesota state law would require the following:

  1. All trademark cease-and-desist letters sent to a Minnesota entity by an entity with a presence in Minnesota must contain specific language notifying the recipients of their right to a settlement conference through the Minnesota Office of Administrative Hearings; not available after suit has been commenced by any party.
  2. The primary purpose is said to assist the parties in resolving disputes and the secondary purpose is said to identify and label cases of “trademark bullying.”
  3. The timing, format, and additional requirements are detailed, e.g., how the conference shall not exceed eight hours unless the parties and the judge agree otherwise.
  4. Attendance by parties or their representatives is mandatory; if the party starting the dispute won’t participate, it is liable for a $1,500 fine and the attorney fees, costs, and disbursements incurred by the other party.
  5. At its own cost, any party may provide information such as expert testimony, industry practice standards, and evidence of trademark use in commerce.
  6. If a settlement is not reached but the parties have reached an agreement on any fact or other issue, the alj must issue an order confirming and approving, if necessary, those matters agreed upon. The order is binding on any Minnesota state district court judge who is later assigned to hear a related civil action.
  7. If no settlement is reached, any party may request the issuance of an alj summary. The alj may issue such a summary without the request of any party if the alj believes that the claim brought is a case of “trademark bullying.”
  8. Treble damages may be awarded against a party guilty of “trademark bullying”.
  9. If a party is found by a Minnesota state district court or the Office of Administrative Hearings to have engaged in “trademark bullying” more than two times in a period of ten years the party may have their right to conduct business in the state revoked.
  10. The cost of the settlement conference is split equally, unless the alj orders otherwise.
  11. The proposed effective date is August 1, 2012, and would apply to disputes evidenced by cease-and-desist letters and similar communications sent on or after that date.

I’m thinking this proposed legislative solution to “trademark bullying” really misses the mark, your thoughts?

Apparently has led to the creation of a new blog entitled Trademark Bully — Kindly Back Off!

The TrademarkBully.com domain was registered just days ago, by someone who has shielded their identity (doesn’t real blogging require transparency?) and it resolves to a WordPress Blog, with a couple of initial posts from yesterday.

It also reveals the blog’s intended purpose this way:

We represent people who are dedicated to bring exposure to trademark bullying and to help victims who feel helpless in the face of a bullying attempt.  If you believe someone is trying to use trademark law and litigation tactics unfairly in order to put an end to your business, share your story here.  We believe there is a difference between  separate  review your case, and if we find that you are a victim of a trademark bully, we will publicize your case on this site.  In the meantime, please visit our Bully Victim Help Center, where you will find various resources to help you stave off this bullying attempt.

Victims:  As of now, one of the few effective ways to fight trademark bullying is to bring public attention to this practice.  By submitting your case you will be informing consumers and the public of cases where trademark owners attempt to enforce their trademark rights beyond a reasonable interpretation of the scope of the rights granted to them.

Consumers:  Trademark bullying affects us all, not only those who are bullied directly.  Bullies stifle competition, thereby artificially raising prices on their products, and putting a strangle hold on our ability to innovate and introduce exciting new products into the market place.

Since there is not much content yet on the page entitled Bully Victim Help Center, looks like your best bet is still to attend the highly anticipated live webinar tomorrow at 1:15 PM CST: “Strategies for Dealing With Trademark Bullies.”