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.

Here are the top 3 things that we believe that corporate clients are looking for in their trademark attorneys when faced with trademark litigation:

1.   A balanced approach to litigation. Effective litigation management involves mapping both legal and business outcomes and alternatives.  Encouraging clients to become actively involved in litigation and settlement scenarios and discussions should be a integral part of any trademark infringement litigation strategy. Therefore, outside trademark counsel should explore alternative dispute resolution (ADR) alternatives designed to seek out business resolutions to trademark conflicts rather than immediately resorting to litigation.

2.   Openness to business dialogue. Trademark litigators are often trained to view settlement discussions as a sign of weakness.  Sophisticated clients, on the other hand, view such engagement as an opportunity to resolve the dispute in question with their business counter-part on the other side of the table.  Why?  Because both parties to a trademark lawsuit have the same economic goals:  to increase company revenue, mitigate business risks, and allocate their limited operating budgets to business development initiatives rather than litigation expenses.  Business-to-business settlement discussions therefore should be encouraged, when appropriate.

3.  Alternative Fee Arrangements. Today’s in-house IP counsel and corporate officers are looking for ways to efficiently manage their legal budgets and still proactively safeguard and protect their trademark portfolios.  Alternative fee options that include a combination of hourly rates, flat-fees, and/or success fees provide both client and attorney the incentive to make the most out of their relationship, often to the benefit of both.

Keeping in mind the client’s primary business goals is a hallmark of any great trademark law firm, and should lead to greater client satisfaction, appreciation, and more client referrals.