A trademark serves as a fixed representation of a business’ brand and its goodwill, and conveys a message to consumers of the quality of goods and services offered by the business. However, recently businesses have been taking their exclusive right to use the marks to an extreme. The United States Patent and Trademark Office (USPTO) defined “trademark bully” as a business that uses its trademark rights to “harass and intimidate” another business beyond what the law might be “reasonably interpreted to allow.” There can be big money in doing this kind of ‘extreme trademark protection’ (though ‘protection’ is questionable).
Typically, it is larger, more cash-rich businesses use their near unlimited resources to find smaller businesses and convince them to abandon their trademark, even though it may not conflict with the trademark rights of the larger businesses. Since these smaller companies are less equipt or cash-rich to affrd the high legal fees that come with defending a trademark lawsuit, they often agree to abandon their trademark.
Even if the smaller business does defend and goes on offense by filing counterclaims for trademark bullying, the “bully” has an easy escape plan even if they are caught overstating their trademark rights. For example, in the 2013 case, Already LLC v. Nike Inc., the U.S. Supreme Court dismissed Already’s counterclaim of trademark bullying, only after Nike became extremely willing to drop its original trademark claim. Thus, a trademark ‘bully’ can dismiss its trademark claims and agree not to pursue the other party, which could eliminate the chance for the “bullied” party to receive any relief.
Under 15 U.S.C § 114(2)(d)(iv), damages are awarded when a trademark owner – in bad faith – seeks to force the other party into abandoning their domain name. However, since a trademark owner can dismiss the claim at any time, it makes it extremely difficult for the bullied party to retain any damages that could have been incurred and awarded.
Set forth below are some tips to avoid being labeled a “trademark bully” and costly/ unnecessary law suits.
- Avoid aggressively opposing any trademark application that is remotely close your trademarks, If it does not conflict with your mark or confuse consumers, you do not have a right to force businesses to abandon their mark.
- Thoroughly investigate any third-party use and the way they are using it and then come to a reasonable decision whether to pursue action. The Business Lawyers at The Jacobs Law LLC can help you with this decision.
- Use a Trademark Watching Service, that will monitor the USPTO database and advise trademark owners when a potentially conflicting trademark application has been filed.
- Use a marketing associate to search for potentially conflicting use of a trademark. This person should know the marketplace and better understand how the third-party’s use of a trademark will conflict or confuse consumers.
- Consider alternative actions other than the traditional cease and desist letter or filing of a lawsuit. Sometimes simply notifying the third-party user of your registered mark and exclusive right to use the trademark and that you will be watching the third-party’s use, may be sufficient. You could also negotiate an agreement that sets boundaries as to the extent of the third-party’s use of the trademark.
If you need help registering a trademark or dealing with the use of your trademark, logo, brand name or trade name by a third party, the Business and Trademark Lawyers at The Jacobs Law LLC can help. Contact us today at TRADEMARKS@THEJACOBSLAW.COM or 800-652-4783.
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