Trademark Infringement

A recent survey of global companies found that trademark infringement is on the rise.   The survey was conducted by Compumark, a leader in trademark research and brand protection solutions.   Despite the fact that 80 percent of the executives polled believe that trademark infringement is a growing problem, only fifty percent admitted to having comprehensive trademark watch services in place.

Highlights of the survey include the following:

  • 53 percent of respondents reported taking trademark enforcement actions against third-parties
  • 34 percent of respondents indicated that their company had to change a name due to possible trademark infringement issues
  • Numerous problems have arisen from trademark infringement, including loss of revenue (26 percent) and damage to brand reputation (21 percent)

Trademark Infringement Monitoring

Trademark enforcement strategies begin with best practices.  Brand owners and inhouse trademark counsel are advised to incorporate some or all of these tactics into their brand enforcement programs.

Trademark watch.   A trademark watch service is a great investment that monitors the USPTO and other national trademark registrars for confusingly similar applications.

Marketplace monitoring.    Companies such as Net Names offer brand owners comprehensive brand monitoring tools to notify brand owners when counterfeiters or unauthorized sellers are using a company’s trademarks without permission.

Trademark Opposition.  When a third-party applies for an application that is confusingly similar to a company’s brand name, a trademark opposition or cancellation proceeding may be instituted.

Rapid enforcement.    Agile enforcement mechanisms such as cease and desist letters, and Amazon or Google takedown notices, can be cost-effective means to stop the unauthorized use of trademarks without the need of filing a trademark infringement lawsuit.

Companies with effective trademark enforcement programs have well-developed plans in place, and constantly review them to ensure that the company’s business priorities are aligned with its brand enforcement budgets and goals.

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In business, there are some secrets worth sharing – particularly if they can help maximize profits and mitigate risks.  And while many innovative ideas are not necessarily original, merely bringing oft-neglected ones into the light can do a lot of good for companies that wish to use them to their competitive advantage.  So with this in mind, let’s start the New Year with a provocative statement: your company’s most valuable assets most likely are not insured against theft, damage, or loss to a competitor.

Yes, that’s right — your intellectual property is showing.

Got IP Insurance?

It is now a well-accepted business valuation maxim that intangible assets such as brands, copyrights, patents, and trade secrets are often valued greater than tangible assets consisting of buildings, inventory, and equipment.  Despite this, a vast majority of businesses fail to carry stand-alone intellectual property insurance coverage.  Why the disconnect?  It begins with a lack of awareness and education of the need for intellectual property insurance products.  For example, in recent articles by Forbes and Entrepreneur that discussed over 10 types of business insurance coverage a company should carry, not one of them was intellectual property insurance.

Yet, consider the following trademark protection and litigation cost facts:

  • In 2012, over 243,000 new trademark applications were filed with the United States Patent and Trademark Office
  • According to the American Intellectual Property Association, the average cost of trademark litigation through trial for cases with the amount in controversy of $1 million or less is $373,000.  Where the amount in controversy is $1M to $10M, the average cost of litigation through trial is $710,000.

Trademark Insurance: Your New Year’s Resolution

Quite often, commercial general liability (CGL) policies specifically exclude claims for trademark infringement.  Now is the time to consider trademark insurance coverage to protect against the costs and expenses of trademark infringement and/or to mitigate the costs of trademark enforcement.  Specialty trademark insurance coverage may be found through insurers such as Intellectual Property Insurance Services Corporation, one of the pioneers in intellectual property insurance coverage in the United States.  Trademark protection insurance polices include coverage for trademark defense (including trademark infringement), abatement insurance, and multi-peril policies.

By having trademark insurance, companies can be confident that they are protecting their valuable brands in a sensible and cost-effective manner.

What’s wrong with trademark litigation today?  Well, in a word, economics.

A national law firm is hired to represent a consumer brand company in a trademark infringement matter and wants to show both the client and the opposing party that it means business.  A flurry of motion practice ensues, aggressive discovery tactics become the norm, and the law firm proudly establishes its very own “war room” to determine what part of the kitchen sink it intends to hurl over the ramparts next. Welcome to Legal Gladiators – Trademark Litigation Edition.

Trademark litigation is an expensive undertaking for trademark owners.  According to a recent survey by the American Intellectual Property Law Association (“AIPLA”), the average legal fees and costs for a case with the amount in controversy under $1 million is $202,000 through the end of discovery and $375,000 through trial.  Coupled with the fact that less than 5% of cases actually proceed to trial, it would seem to make economic sense for trademark attorneys to counsel their clients to consider settlement options as part of an overall trademark dispute strategy.

Continue Reading What Clients Really Want When Hiring a Trademark Law Firm for Litigation Matters

As a trademark opposition attorney, I have first-hand knowledge of trademark bullying tactics that are designed to outspend and harass small business trademark applicants into abandoning their trademark application. The practice also spills into federal court actions for trademark infringement, cyberquatting, and other related matters.  This phenonemnon is very real.

As part of the Trademark Technical and Conforming Amendment Act of 2010, Congress instructed the United States Patent and Trademark Office to take the unusual step to address this issue by sending out a trademark bullying survey to trademark attorneys, small business owners, and interested parties to determine whether they had been the victims of trademark bullying. The survey invited respondents to share their experiences with trademark litigation tactics, “especially those that may involve an attempt to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to trademark owners.”  Solicited examples of trademark litigation bullying tactics included abuses of:

  • trademark cease and desist letters
  • domain name cease and desist letters
  • trademark opposition proceedings
  • trademark cancellation proceedings

and other trademark-related matters that have adversely impacted the respondents, their clients, and/or business.

The resulting Report to Congress, Trademark Litigation Tactics and Federal Government Services to Protect Trademark and Prevent Counterfeiting, included the following highlights:

  • approximately 60% of respondents viewed trademark bullying as a real problem
  • a majority of respondents opined that Congress has a responsibility to discourage or prevent aggressive trademark litigation tactics
  • many respondents encouraged the Trademark Trial and Appeal Board to amend its rules to create and enforce tough sanctions against such behavior in trademark opposition proceedings

The subject of abusive trademark lawyer and litigation tactics subject is worthy of further discussion and commentary as there exist several strategies to combat such actions by deep-pocketed trademark litigants. If you or your company is involved in a trademark opposition or other trademark dispute, it is recommended that you speak with a qualified trademark attorney to determine how to best approach the case in a cost-effective and vigilant manner.

I am a trademark opposition lawyer that charges a flat-fee for my services.  Charging one, flat fee for a trademark opposition case is advantageous to my clients for the following reasons:

  • the total cost to the client is fixed and predictable
  • the fee agreement between the client and me is transparent and unambiguous
  • there are no surprises when the bill arrives

Conversely, billing the client hourly for trademark attorney services creates a host of problems for the client.  Such challenges include the following issues that may arise during the course of representing a company in a trademark opposition case:

  • open-ended hourly billing
  • potential to create more billable hours within the case
  • lack of incentives for early case settlement
  • potential for fee disputes

In my opinion, it is always in the trademark owner’s best interest to negotiate a flat-fee agreement for representing them in trademark opposition cases before the Trademark Trial and Appeal Board.

 

 

 

 

As a trademark lawyer that handles trademark opposition and trademark cancellation cases, I have a simple philosophy in dealing with the business and legal challenges that my clients face as a result of being involved in litigation proceedings before the Trademark Trial and Appeal Board.

1.  Listen to the Client

It is often difficult for people to truly listen to the other person while having a conversation.  This is doubly true when it comes to a trademark attorney listening to his or her client.  What are the client’s needs?  What is their preferred outcome?  What are their cost constraints?  These and many other questions need to be answered prior to engaging in the attorney/client relationship.

2.  Be Respectful of Your Client’s Money

Many trademark attorneys operate under a scorched-earth policy, where they believe that the best way to service their client’s needs is to be highly aggressive, both in dealing with opposing counsel and the amount of paper that they generate as part of the case.  It it my experience that part of this aggression is economic in nature:  if a trademark attorney is charging hourly for his services, then it is in his or her interest to generate as many billable hours as possible as part of the trademark opposition case.  Yes, you heard me right!  Is this the rule?  Certalnly not.  But you should be mindful of hiring attorneys who will not discuss with you a flat-fee option or at the very least, a cap on their fees for the case.

3. Be Respectful of Opposing Counsel

Having a pleasant and respectul working relationship with the attorney for the other side is essential to best serving the needs of your client. Why?  Because by doing so, this often saves the client money in attorney’s fees.  If I am able to cooperate with opposing counsel during the case, many potential disputes regarding the discovery process can be avoided, leading to less time (and billable hours) spent on fighting and more time on seeking an amicable resolution that is in the best interests of my client.

There are many fine trademark attorneys who adhere to the above tenets of professional collegiality.  They are the ones who are a pleasure to deal with and who quite often best serve the interests of their clients.

 

In discussing how a trademark opposition works, it is helpful to go over the basics of what a trademark opposition is, and what to expect as the case proceeds.

A trademark opposition is when one party elects to oppose the existing trademark application of another party due to one of several grounds, such as the pending trademark application is confusingly similar to the complaining party’s existing trademark registration.  The complainant in a trademark opposition is called the Opposer.  The trademark application owner whose trademark application is being opposed is called the Applicant.

Trademark Oppositions are filed and heard before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office. Like other cases in civil courts throughout the country, a trademark opposition has several procedural and substantive phases to the case, including:

  • Complaint and Answer
  • Discovery (including interrogatories, request for production of documents, request for admissions, and depositions)
  • Trial Testimony and Submissions (including Notice or Reliance)

In addition to the above, a trademark opposition can involve several motions of law that either trademark opposition attorney may file on behalf of his/her client, such as a motion to dismiss, motion to compel, or motion for summary judgment.  What is the longest phase of a trademark opposition case that has the potential to be the most expensive?  In most instances, the discovery phase is what takes the most time and the costs the most in terms of attorney’s fees.

In subsequent postings, I will discuss how you can possibly save money in trademark opposition proceedings through effective dispute resolution techniques. 

 

What comes first?  A trademark registration or use of the trademark in commerce by the owner who is seeking registration?  In other words, can one obtain a federal trademark registration without first using the mark in commerce?  The answer is no!

Trademark use is always a prerequisite to registration in the United States Patent and Trademark Office, with minor exceptions.  Note that although registration is not a requirement for use, owning a trademark registration has several advantages, including the following:

  • constructive notice to the public that you are the owner of the trademark in question
  • a legal presumption that you are the owner and have all rights associated with ownership, including the right to prevent third-parties from using or registering confusingly similar trademarks
  • Heightened damages in certain case

Before applying for a trademark registration, always consult with a trademark lawyer to determine whether the trademark is available for use and/or registration.  By taking this simple step, you will save you and your company time, aggravation, and potential legal liability down the road.

Connecticut trademark lawyers representing Parfums de Coeur Ltd. have filed a case against Victoria’s Secret Brand Management and its parent company Limited Brands Inc., alleging trademark infringement and other causes of action for Victoria’s Secret use of the trademark VS Fantasies and Victoria’s Secret Fantasies for among other things, eau de parfum.  The case, Parfums de Coeur Ltd. v. Victoria’s Secret Stores Brand Management Inc., is currently pending in United States District Court in Connecticut.

Parfums de Coeur is a Darien, Connecticut company that describes itself as a leading retailer of designer quality fragrances and colognes.  Parfums de Couer alleges that the Victoria’s Secret VS Fantasies trademark is likely to cause confusion with Parfums de Coeur’s family of “fantasy” trademarks, including Body Fantasies and Sexiest Fantasies. Victoria’s Secret has trademark applications for the VS Fantasies trademark currently pending in the United States Patent and Trademark Office.

 

When I first started playing baseball at the age of 5, my coach started with the basics.  Sure, I saw plenty of games on TV, but playing and watching require two different skill sets.  Want to play on the trademark field?  Then it’s best to start with some fundamentals!

A trademark is any word, symbol, design, tagline, or logo that is used in association with goods or services to identify and distinguish the products of one company from those of another.   In business parlance, a trademark is also known as a “brand name.”

Examples of trademarks include McDonald’s®, the Nike® “swoosh” design and Just do it® slogan, and the Coca-Cola® bottle design.

A service mark is a trademark that is used in connection with services, as opposed to goods.  An example of a service mark is FEDEX® for ground and air shipping and transportation services.

Trade dress is the protectable look and feel of a product shape, or in the case of restaurants and stores, the elements of their layout and design that are proprietary.  An example of protectable trade dress is a unique perfume bottle shape.

Take-Away:  Trademarks are a vital part of any brand and marketing positioning strategy. What’s in a name? Perhaps your entire competitive advantage!