Trademark Bullying: Latest Developments Cease and Desist and - - PowerPoint PPT Presentation

Trademark Bullying: Latest Developments

Cease and Desist and Litigation Tactics in the Battle for Brand Protection

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

The audio portion of the conference may be accessed via the telephone or by using your computer's

• speakers. Please refer to the instructions emailed to registrants for additional information. If you

have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

WEDNESDAY, APRIL 11, 2013

Presenting a live 90-minute webinar with interactive Q&A

Stephen R. Baird, Shareholder, Winthrop & Weinstine, Minneapolis Leah Chan Grinvald, Assistant Professor of Law, Saint Louis University School of Law, St. Louis Stephen Feingold, Partner, Kilpatrick Townsend & Stockton, New York

Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory and you are listening via your computer speakers, you may listen via the phone: dial 1-866-328-9525 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps:

• In the chat box, type (1) your company name and (2) the number of

attendees at your location

• Click the word balloon button to send

FOR LIVE EVENT ONLY

4

“Trademark Bullying” v. Legitimate Trademark Enforcement: Strategies and Best Practices Strafford Publications Webinar April 11, 2013

Stephen W. Feingold Partner Kilpatrick Townsend & Stockton LLP New York 212-775-8782 sfeingold@ktslaw.com Leah Chan Grinvald Assistant Professor of Law Saint Louis University School of Law

• St. Louis

314.977.4241 lgrinva1@slu.edu Stephen R. Baird Shareholder Winthrop & Weinstine Minneapolis 612.604.6585 sbaird@winthrop.com

5

Anti-Trademark Attorney Sentiment

6

More of the Same From Dilbert

7

Mark Parisi’s Perspective on Trademark Bullying

8

Overview of Discussion

• Definition of “Trademark Bullying”

– Various Alternatives

• Does the claim have legal merit?

– Not a bright line

• Real World Examples

– Practice Tips, Strategies and Best Practices

• The Art of Engagement: C&D Style & Tone
• Minnesota’s Legislative Answer?

9

Definition of a Trademark Bully?

Senator Patrick Leahy 2010

• “I am concerned that large corporations are at times abusing the

substantial rights Congress has granted them in their intellectual property to the detriment of small businesses,” said Sen. Leahy. “We saw a high-profile case like this in Vermont last year involving a spurious claim against Rock Art Brewery. When a corporation exaggerates the scope of its rights far beyond a reasonable interpretation in an attempt to bully a small business

• ut of the market, that is wrong.”

US PTO 2010 Survey

• Version 1: “[A] trademark owner that uses its trademark rights to

harass and intimidate another business beyond what the law might be reasonably interpreted to allow.”

• Version 2: “…aggressive trademark litigation tactics…”

10

Definition of a Trademark Bully?

• What are the elements?

– Unfounded claim?

– How unfounded? Where on the continuum between arguable claim and Rule 11?

– Imbalance of resources?

– Large plaintiff exploiting small defendant’s lack of resources to defend?

– Repeated conduct?

– Legitimate enforcement program or evidence of bullying?

– Aggressive litigation or pre-litigation tactics?

– Is an obnoxious demand letter okay if the claim is good? – If the demand letter is very polite and the claim is unfounded, is it bullying?

One Proposed Definition: An unfounded trademark claim by a trademark owner exploiting its superior resources and the defendant's relative lack of resources to compel a result that the law does not support.

11

Other Forms of Trademark Bullying

• Section 35 provides for damages to be awarded to

plaintiff subject to “principles of equity.

• Courts interpret Section 35 to require evidence of

willfulness or actual confusion to obtain monetary relief.

• 1999 technical amendment with respect to FTDA

amended Section 35 to read: “When a violation of any right of the registrant of a mark registered in the Patent and Trademark Office, a violation under section 1125(a) or (d), or a willful violation under section 1125(c), shall have been established in any civil action arising under this Act …”

12

Monetary Damages

• In Banjo Buddies, Inc. v. Renosky, 399 F.3d 168 (3d
• Cir. 2005), Court found that use of term “willful” in (d)

meant that all other relief in Section 35 did not require showing of willfulness.

• This easier access to monetary relief has spurned an

industry of trademark squatters. – See e.g. GMA Accessories, Inc. v. BOP, LLC, 765 F.Supp.2d 457, 470-71 (S.D.N.Y. 2011) – (Seeking to protect use of CHARLOTTE as style designation).

• Some brand owners have retained contingency

lawyers to bring claims and keep any settlement as compensation.

13

Likelihood of Confusion

• Strength of mark
• Similarity of marks (sight,

sound, meaning)

• Similarity of goods/services
• Channels of trade
• Actual confusion
• Intent
• Sophistication of consumers

14

Types of Actionable Likely Confusion

• Source
• Sponsorship
• Affiliation
• Connection
• Approval
• Also Protection for the “Least Sophisticated

Potential Consumers”

15

Spectrum of Distinctiveness

16

Dilution (Federal)

• For famous marks
• “widely recognized by the general consuming public of the United

States”

• no niche fame
• Likelihood of Dilution
• “association arising from the similarity” of the marks that impairs

the distinctiveness or tarnishes the famous mark

• No confusion or competition required
• Likelihood of, not actual, dilution
• Defenses
• fair use (descriptive and nominative), comparative advertising,

commentary, parody and non-commercial uses

• State statutes provide even broader protection

17

Is There A Duty to Enforce?

• Often stated that Trademark Owners have

“duty” to enforce rights or risk losing rights.

• No such obligation exists in Lanham Act.
• While courts – parroting brand owners –

have used this language in decisions, more thoughtful analysis shows that brand owner need only act against use that impairs the distinctiveness of the brand.

18

Real World Examples

• Is it Bullying?
• What else could it be?
• Legitimate (if aggressive) infringement claim
• Legitimate dilution claim
• A mistake

– Auto-policing, failure to investigate, etc.

• Ambiguous fair use
• How do you determine?
• Tactics to Defend / Settle

19

Trademark Bullying?

20

Trademark Bullying?

21

Trademark Bullying?

22

Trademark Bullying?

23

Already, LLC v. Nike, Inc., 105 U.S.P.Q.2d 1169 (2013).

• Voluntary dismissal
• With prejudice
• Covenant not to sue
• Moots counterclaim
• No longer jurisdiction
• Notwithstanding the alleged

concern about rewarding TM bullying

• Supreme Court missed

golden opportunity. WHY?

24

Trademark Bullying?

25

Trademark Bullying?

• Chick-fil-A claims there is a likelihood of confusion between “Eat

Mor Chikin” and “Eat More Kale.” A cease and desist letter was sent to Bo Muller-Moore, a Vermont folk artist responsible for the “Eat More Kale” slogan, a phrase Bo intends to register as a trademark.

• Bo has retained counsel and is fighting a very public “David vs.

Goliath” battle, claiming that no one could ever possibly be confused – But the test for infringement is likelihood of confusion, not actual confusion.

• Is Chick-fil-A overreaching in its enforcement efforts? "In a

statement, Chick-fil-A said, ‘We must legally protect and defend

• ur ‘Eat mor chikin’ trademarks in order to maintain rights to the

slogan.’" – New York Times (Dec. 4, 2011) – But there is no legal obligation to enforce and the risk of genericide doesn’t seem real.

• On the other hand, a fair use defense is belied by trademark use

and attempted registration.

vs

26

Trademark Bullying?

27

Minnesota’s Treatment of

Trademark Bullying

• Minnesota’s Proposed Legislative Answer
• H.F. 1116 Introduced February 27, 2013
• Basically a Fee Shift for Prevailing Parties
• “Trademark Bullying” defined as: “The 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.”

• Remedies for such conduct: “The court in exceptional cases

may also award reasonable attorney fees to the prevailing party. Exceptional cases include cases where a party brings suit for harassment, malicious, fraudulent, or willful purposes, including trademark bullying.”

• H.F. 1116 Referred to Committee, No Hearing Likely Until 2014

28

Minnesota’s Treatment of

Trademark Bullying

• Minnesota’s Previous Proposed Legislative

Solution

• H.F. 2996 Introduced March 28, 2012
• “Small Business Trademark Protection Act”
• Stated Purpose to “Identify and Label” Cases of “Trademark

Bullying”

• Same Definition of “Trademark Bullying” as in Current Bill
• Required Cease and Desist Letter Procedures
• Mandatory Settlement Conference w/Fines and Attorney Fees
• Treble Damages and Business License May be Revoked

29

Practice Tips, Strategies & Best Practices When Asserting Rights

• Create and Publish Statement About

Perceived Zone of Protection

• Provide Fair Use Guidelines.

– See e.g. http://www.gedtestingservice.com/uploads/files/9 2f94ea08857ea38ddb376e7e888a7a3.pdfSolid Due Diligence

• Engaging in Process Will Foster Realistic

Evaluation and Provide Guidance When Reality Hits

30

Practice Tips, Strategies & Best Practices in Receiving TM Demands

• Remember, No One Likes Fair Use Much

Less Parody

– Don’t Start What You Won’t/Can’t Finish

• Consider Call Over Letter
• Be Prepared for Social Media Campaign

– Are you in position of NFL to create THE GAME “myth” or will you be the next victim of the Bullying Band Wagon?