Trademark Bullying: Emerging Legal Threat Cease & Desist and Litigation Tactics in the Battle for Brand Protection

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TUESDAY, MARCH 6, 2012

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

Anne Gundelfinger, Law Office of Anne Gundelfinger, Menlo Park, Calif.

Leah Chan Grinvald, Assistant Professor of Law, Saint Louis University School of Law, St. Louis

Stephen R. Baird, Shareholder, Winthrop & Weinstine, Minneapolis

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“Trademark Bullying” v. Legitimate Trademark

Enforcement: Strategies and Best Practices

Strafford Publications Webinar

March 6, 2012

Anne Gundelfinger Principal Law Office of Anne Gundelfinger Menlo Park 650.739.5849 info@gundelfingerlaw.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

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Anti-Trademark Attorney Sentiment

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More of the Same From Dilbert

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Mark Parisi’s Perspective on Trademark Bullying

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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

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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 out 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…”

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Definition of a Trademark Bully?

Most oppositions filed?

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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.

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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

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Types of Actionable Likely Confusion

• Source • Sponsorship • Affiliation • Connection • Approval

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Spectrum of Distinctiveness

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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

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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

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Trademark Bullying?

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Trademark Bullying?

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A Trademark Bully?

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Trademark Bullying?

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Trademark Bullying?

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Trademark Bullying?

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Trademark Bullying?

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Frito-Lay v. Princeton Vanguard (pending before the TTAB)

• Frito-Lay challenging PV registration of PRETZEL CRISPS for “pretzel crackers” (disclaiming “pretzel”) on the grounds that the mark is generic or merely descriptive

• Bullying? Does the challenge have merit? • Should the term “pretzel crisp” be available for use by competitors with competing products? • What if PV had brought the same case against Frito-Lay? Bullying?

“This is so different from anything else we’ve faced because we’re not fighting a product in the supermarket, we’re not fighting against an institution like a bank, we’re not dealing with an act of nature,” Mr. Wilson said in an interview at his company’s headquarters here. “This fight is about a big company that wants to dominate the snack food category by crushing a little company like ours rather than by competing with us.”

As reported by The New York Times (2/20/12)

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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 our ‘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

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Trademark Bullying?

• Wella Corporation, a/k/a Procter & Gamble, opposed registration of WILLA filed by a new start-up business, Willagirl LLC, based on P&G’s WELLA registrations for related products. – Trademark bullying or legitimate trademark

enforcement? P&G has trademark rights to WELLA dating back to the early 1930s and a single vowel differentiates the marks.

• Willa took the fight to federal district court and sought suspension of the trademark opposition proceeding before the TTAB – a very smart, but very costly decision.

• Wella/Willa trademark dispute recently settled prior to trial – confidential, of course.

vs.

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Practice Tips, Strategies & Best Practices When Asserting Rights

• Solid Due Diligence • Realistic Scope of Rights • Assert Realistic Claims • Revisit Enforcement Strategy • Carefully Craft Letters • Engage Business Interests • Weigh Cost/Benefit Analysis • Engage Client’s PR Team • Calm and Persistent Negotiation

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Practice Tips, Strategies & Best Practices in Receiving TM Demands

• Solid Due Diligence • Realistic Analysis of Claim • Competent TM Counsel • Best Defense-Good Offense • Use Available Legal Tools • Right to Use v. Registration • Public Relations Campaign • Social Media Campaign • Calm and Persistent Negotiation