The Trademark Bully

The USPTO actually defines a trademark bully 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.”

A registered trademark or servicemark is a form of legally protected intellectual property that identifies the products or services of a company. To identify your goods or services, you can trademark a brand name, company name, trade name, graphic, motto or slogan, and even a sound (like the chime you here when a well-known streaming service starts up).

Trademark ‘Policing’ & Bullying

But many owners of registered trademarks and servicemarks do not realize that they must be consistently vigilant in preventing the unauthorized use of their mark. This is known as “policing.” the trademark or servicemark. Unfortunately, many mark owners often overreach and engage in unjust policing or enforcement of their mark. Some mark owners are also highly aggressive and seek to prevent any use of the same or similar mark for any goods or services. These types of trademark or servicemark owners are commonly referred to as “trademark bullies” – and no one likes a bully.

A trademark owner must walk a fine line between being too zealous in enforcing its rights and not being zealous enough… Mark owners may, however, sometimes be too zealous and end up overreaching.

Some of these over-zealous trademark-bullies fall victim to their own over-policing resulting in costly attorney’s fees, damages or settlement agreements in favor of the ‘bullied’ party. This can occur when the mark owner fails to properly assess the alleged ‘infringing’ conduct or considers its trademark or servicemark to be more famous than it actually is–resulting in an exaggerated and distorted belief in the strength of the mark. Some mark owners incorrectly believe they must police every single use of their mark by another party, even if that use is ‘fair use’ or simply non-infringing.

Trademark bullying has become so common that the USPTO has taken notice and, in a report to Congress, stated “A trademark owner must walk a fine line between being too zealous in enforcing its rights and not being zealous enough… Mark owners may, however, sometimes be too zealous and end up overreaching”. The USPTO actually defines a trademark bully 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.”

Trademark bullies typically begin the ‘bullying’ with a cease and desist letter sent to the alleged ‘infringer’ in which they demand the infringer immediately stop using the mark or face a a lawsuit and a myriad of penalties. The problem is that some of these trademark owners fire off the cease-and-desist demand before doing the appropriate homework.

The Lapp Test

Before sending a cease and desist demand to a party believed to be infringing on a mark, the owner of the trademark or servicemark should consult an attorney to do the following:

1. assess whether you actually own or have exclusive rights to the mark or have an active certificate of registration;
2. evaluate whether the mark itself is a valid and enforceable trademark and, most importantly;
3. examine the likelihood of consumer confusion concerning the origin of the goods or services between the subject mark and the mark used by the purported infringing party

The “Lapp Test” includes the following factors and is used to assess whether there is a likelihood of confusion between the marks before sending a cease and desist letter:

• strength of owner’s mark;
• degree of similarity of the marks
• sophistication of the consumers who generally purchase the goods or services and how careful or attentive they would be in making a purchasing decision (e.g. the higher the cost of the goods or services the more ‘sophistication’ and care consumers are thought to use when making purchasing decisions);
• length of time the alleged infringing party used the subject mark without causing any actual consumer confusion;
• evidence of actual confusion (or lack thereof);
• intent of the alleged infringing party in adopting or using the mark;
• similarity of marketing and advertising channels;
• extent to which the targets of the parties’ sales and marketing efforts are the same;
• similarity of the goods or services associated with the marks;
• relationship of the goods or services in the minds of consumers;
• identity / function / use; and
• other factors that tend to suggest whether consumers might expect the purported owner to sell both goods or services, sell the goods or services in the infringing party’s market, or expand into the infringing party’s market.

I received a Cease and Desist Demand

If you receive a cease and desist letter, you have at least the following options:

1. comply with the letter;
2. seek to reach a compromise with the other party;
3. build a case supporting your legal use of the mark (and either defend any action brought against you, file counterclaims and/or be pro-active and seek to cancel the other party’s registration);
4. do nothing or take a ‘wait n’ see’ approach

Regardless, you should always consult competent legal counsel if you receive a cease and desist letter. Trademark litigation is a more complicated legal subject and there are often opportunities for the allegedly ‘infringing’ party to turn the tables and file counterclaims, seek to cancel the other party’s trademark registration, and/or pursue attorneys’ fees, costs and other damages for ‘trademark bullying’ tactics.

If you have received a cease and desist letter or believe another party is using a mark that is the same or substantially similar to your mark, for the same or similar goods or services, The Jacobs Law LLC can help. Contact us at 1-800-652-4783 or email ContactUs@TheJacobsLaw.com. Our Business Law and Business Litigation lawyers can draft and deliver a Cease and Desist demand, and pursue or defend the resulting litigation if necessary.

Your Attorneys For: Trademark & Service Mark Maintenance and Protection