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Are You a Trademark Bully?

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By Jonathan R. Tung, Esq. on February 05, 2016 2:57 PM

By now, we've all heard of patent trolls, but now is a good time for us to visit its lesser known cousin, the trademark bully. And yes, just like copyright bullies and the patent troll, they're not particularly loved. The reasons for their existence, unsurprisingly is related to the complexities of Intellectual Property practice.

Are you (or your company) a trademark bully? To find out, take a look at the list of symptoms below.

IP Law Again

The world of intellectual property law is, in many ways, one of the most fascinating areas of legal practice. It also has the reputation of being opaque; it generates controversy; and it can be incredibly profitable. Just imagine the amount of money on the line for mega-companies and their patents? And even Apple with its billions has got to hurt a little with its recent loss to VirnetX over violations that made FaceTime possible.

Trademarks Are High Maintenance

Patents and copyrights are special in the sense that the rights owners can just sit there and sue -- or threaten to. But trademark holders enjoy no such privilege. The trademark must be in actual use at the time of the claimed violation. We'll get into some of the legal issues implicating trademark, but peruse this list of highly interwoven factors:

  • Your company fails to conduct an objective evaluation of the alleged trademark violation: If your client owns a trademark and issues a cease and desist letter to a company claiming infringement without first checking to see the violation's relation to the delineated goods or services, they're probably being a bully.
  • Your company inflates the actual scope of protection: Trademarks are issued and apply to certain classes of goods or services. We associate brands with certain types of goods. Amazon: online retail. Toyota: automobiles. If Toyota were to send a CDL to a small bakery company named after another similarly named Toyota demanding a cease and desist, that would be bullying.
  • Your company misrepresents the risk of consumer confusion: This is another overlapping concept. Brands jealously seek to defend the integrity and exclusivity (in the minds of the market) of their brands. But few people will seriously confuse Toyota Cookies with the Toyota brand of cars. But bullies will push this concept and misrepresent the risk of consumer's confusion.

Shoot Now, Ask Questions Later

A good many trademarks are in the hands of very large corporations who have battalions of lawyers and very large legal wallets that regard pre-litigation and litigation fees as "costs of doing business." Without looking at the merits of a possible fair use usage on the recipient of the CDL, the typical practice is to shoot now and ask questions later.

War Chest vs. Penny Purse

Being highly moneyed helps because this can be an expensive process. Usually, the recipient is not as large and will usually acquiesce. Bullies know this. In fact, the mere receiving of a Cease and Desist Letter is often all that is needed to frighten the other side into submission.

The USPTO knew of the dangers that festoon the IP world. It defined the trademark bully as the "trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow." But even several years after the report was released, IP continues to be littered with egregious IP issues.

A Fine Line

A recurring theme of legal practice is encapsulated by the phrase, "It depends." Those who would be wrongfully accused of being trademark bullies are actually simply protecting their brand in good faith.

An excellent piece touching up on this was written last year by Roxana Sullivana and Luke Curran.This presents particularly sticky issues with trademark law because -- as mentioned above -- trademarks must be cultivated and kept alive. If a trademark owner ceases to use his trademark in the connection with commerce, he could potentially lose his rights under the doctrine of abandonment. But if the owner uses it and does not assert his rights, his brand withers under the phenomenon of "genericide."

So, as in house, your duty is to protect the brand -- but try and employ best practices. Otherwise you too could be targeted undeservedly as the subject of much hate -- like patent trolls.

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