On Feb. 3, I had the pleasure of attending a fantastic program sponsored by the University of San Francisco School of Law’s McCarthy Institute and Microsoft Corp. entitled, “Trademark Law and Its Challenges in 2011” (brochure here; World Trademark Review Blog summary of the event here).
One highlight was meeting J. Thomas McCarthy (photo above), author of the encyclopedic “McCarthy on Trademarks and Unfair Competition,” a treatise that’s familiar to trademark practitioners everywhere.
Prof. McCarthy gave the keynote address on the issue of trademark bullies, answering the question, “When Should Trademark Owners Threaten Suit?”
After recounting examples of what some would cite as over-zealous trademark protection — including Monster Cable’s effort to enforce its trademark rights against a “Monster” mini-golf course depicting monsters — Prof. McCarthy argued that trademark lawyers should ensure enforcement efforts on behalf of their clients are appropriate for each situation.
Following paraphrases excerpts from Prof. McCarthy’s speech. I took notes as best I could, but I certainly did not catch every word. For that reason, I’m not using quotation marks, though I’ve tried to capture Prof. McCarthy’s message. It’s a good one.
*****
What most trademark lawyers worry about is the downside risk of being too lax in their enforcement efforts. They don’t seem to worry about over-reaching. Some are proud to be bullies, as it sends the message that “We’re tough; don’t even think about infringing. Once we shoot a few hostages, everybody will get the message.”
But there’s a downside to over-reaching. One is in Internet shaming campaigns against the over-reaching brand owner. Trademark lawyers should look beyond statutes and cases. Consumers think of themselves in terms of what they consume. Thousands of people on the Internet are ready to throw stones at companies they think are acting like a trademark bully. The reputation of a company can take a hit.
The key to a balanced trademark enforcement program is to avoid extremes. Only rarely does a trademark owner risk losing rights in its mark. The real risk is in losing the mark’s strength. Also laches, but courts understand that laches doesn’t require a trademark owner to object and sue all potential infringers.
Overly-aggressive enforcement measures can backfire, resulting in loss of goodwill and embarrassment to the trademark owner. An overly-aggressive trademark owner has two choices: it can carry out its threats of suit by bringing fringe suits, which can result in unfavorable court decisions or, in extreme cases, liability for abuse of process or for violating Rule 11. That really hurts the strength of the mark.
If an overly-aggressive owner instead bluffs — sends cease-and-desist letters but does not carry out its threats of suit — that will come out one day in discovery. In that case, the trademark owner is on record that each instance is a serious infringement. That kind of bluffing and not suing can hurt the owner’s ability to enforce its mark.
Not all cease-and-desist letters need to say the same thing. They don’t all need to instill shock and awe. Think about results. Overbearing letters will get posted on the Internet and will be part of a shaming campaign. Think of the Goldilocks rule: not too easy and soft, and not too hard and severe.
There are dangers in both directions. Attorneys should sit down with their clients’ decision-makers and see what plans exist for expansion in the future. Why should Monster Cable care about Monster Mini Golf? Lots of famous marks coexist peacefully, so there is no need to police all uses. Follow the Goldilocks rule and like Goldilocks, you will live happily ever after.
Photo credit: University of San Francisco School of Law