Trademark Extortion Revisited: A Response to Vogel and Schachter

Trademark bullying (a.k.a. trademark extortion) is a very controversial notion in trademark litigation in the United States. There, for sure, is a lot of illegitimate trademark infringement happening. Anecdotally, we also know that trademark holders often overstep in the assertion of their otherwise legitimate rights. For the first time, this article documents how large a problem trademark bullying is and how often it happens. Trademark bullying occurs when there is evidence that a trademark holder asserts a non-famous mark against a non-competing entity on or in connection with goods or services into which the plaintiff has no reasonable expectation of expanding. Trademark bully occurs in at least 5.5% of the reported cases. This is the same rate that plaintiffs recover any money damages. In the reported cases, trademark bullying is as statistically significant and relevant as cases where the plaintiff recovers money damages. Also, 5.5% is a floor. Trademark bullying happens at least 5.5% of the time. As there is no reporting or recording requirement in the United States, trademark bullying, if it happens at all, can only be found if we use deductive reasoning. This article is based on the deductive notion that cases where summary judgment was granted for the defendants are likely to manifest trademark bullying and it is appropriate to label them as such. In trademark bullying cases, the quality of the plaintiff’s claim is declining. This conclusion is supported by regression analysis that indicates that it is accurate to over 99% certainty. That is, plaintiffs are bringing claims that are less and less likely to succeed on the merits if tried. As no data (just suppositions) was provided by Vogel and Schachter, it is difficult to claim they are wrong in their analysis. Of course, Rule 11 and the other potential sanctions do exist. With this study, we now know that no Rule 11 sanctions were ever applied to any trademark bullying case. Further, no data is relied on by the various trade organizations (simply outdated dicta from now ancient cases). The data here is the first attempt to prove or disproved trademark bullying. It is provided in the spirit of an academic inquiry. To me, the data here supports the idea that trademark bullying deserves the scrutiny that would be brought to bear if Congress elected to get involved. Clearly, the existing “safeguards” have been proven here to be anything but safe. If non-practicing entities is a matter worth the time and energy of States and Congress, then trademark bullying is as well as both involve entities which upset natural markets for and with intellectual property. As such, Congress should act. Congress could go a long way in stopping trademark bullying if it amended Section 1117 of the Lanham to make it explicit that trademark infringement defendants as well as plaintiffs should be awarded its attorney’s fees when the opposing party acts egregiously. Attorney’s fees should be liberally awarded in cases where the defendant moves for summary judgment and prevails as these cases are the clearest manifestation of trademark bullying

Trademark Extortionist Revisited: A Response to Vogel and Schachter

Trademark bullying (a.k.a. trademark extortion) is a very controversial notion in trademark litigation in the United States. There, for sure, is a lot of illegitimate trademark infringement happening. Anecdotally, we also know that trademark holders often overstep in the assertion of their otherwise legitimate rights. For the first time, this article documents how large a problem trademark bullying is and how often it happens. Trademark bullying occurs when there is evidence that a trademark holder asserts a non-famous mark against a non-competing entity on or in connection with goods or services into which the plaintiff has no reasonable expectation of expanding. Trademark bully occurs in at least 5.5% of the reported cases. This is the same rate that plaintiffs recover any money damages. In the reported cases, trademark bullying is as statistically significant and relevant as cases where the plaintiff recovers money damages. Also, 5.5% is a floor. Trademark bullying happens at least 5.5% of the time. As there is no reporting or recording requirement in the United States, trademark bullying, if it happens at all, can only be found if we use deductive reasoning. This article is based on the deductive notion that cases where summary judgment was granted for the defendants are likely to manifest trademark bullying and it is appropriate to label them as such. In trademark bullying cases, the quality of the plaintiff’s claim is declining. This conclusion is supported by regression analysis that indicates that it is accurate to over 99% certainty. That is, plaintiffs are bringing claims that are less and less likely to succeed on the merits if tried. As no data (just suppositions) was provided by Vogel and Schachter, it is difficult to claim they are wrong in their analysis. Of course, Rule 11 and the other potential sanctions do exist. With this study, we now know that no Rule 11 sanctions were ever applied to any trademark bullying case. Further, no data is relied on by the various trade organizations (simply outdated dicta from now ancient cases). The data here is the first attempt to prove or disproved trademark bullying. It is provided in the spirit of an academic inquiry. To me, the data here supports the idea that trademark bullying deserves the scrutiny that would be brought to bear if Congress elected to get involved. Clearly, the existing “safeguards” have been proven here to be anything but safe. If non-practicing entities is a matter worth the time and energy of States and Congress, then trademark bullying is as well as both involve entities which upset natural markets for and with intellectual property. As such, Congress should act. Congress could go a long way in stopping trademark bullying if it amended Section 1117 of the Lanham to make it explicit that trademark infringement defendants as well as plaintiffs should be awarded its attorney’s fees when the opposing party acts egregiously. Attorney’s fees should be liberally awarded in cases where the defendant moves for summary judgment and prevails as these cases are the clearest manifestation of trademark bullying

On Nontraditional Trademarks

This piece regards nontraditional trademarks like sound, color, scent or even the vertical opening motion of a Lamborghini car door. The protection of trademarks has, historically, walked a fine balance. Naturally, as a society, we want to protect trademarks so that transaction costs are lowered as purchasers make a quick and easy purchasing decision. You see Tide, you know Tide, you buy Tide. However, the protection of nontraditional trademarks upsets this fine balance. If we go too far in the protection we grant unwarranted monopolies to companies to stifle the precise competition the law was meant to encourage. Sometimes, we do not have to protect a trademark claimant to recognize the savings in search costs. In fact, nontraditional trademarks are ornamental, at best, and, at worst, a horrible distraction from the larger job of substantive harmonization so that the transactions costs might be lessened for all companies around the world. This article traces the origins of this protection and concludes that nothing in our history predicts or requires this protection. One Supreme Court decision in 1995 open the floodgates for trademark application activity, but litigation rates did not, correspondingly, increase. I relied on a study I did of all 2,762 reported trademarks decisions from the inception of the Lanham Act (the US trademark law) through 2007. I coded every case. The numbers are reported in this article. Trademark registration activity is still very small and litigation activity is near nonexistent. However, the United States requires potential trading partners to protect nontraditional trademarks or we will not enter into bi-lateral trade agreements. We have encouraged the World Intellectual Property Organization to conduct a massive study on the protection of nontraditional marks. Based on this flawed study, some countries are now contemplating amending their trademark laws to explicitly recognize nontraditional trademarks. This is a cause without an objective. People generally believe that America routinely protects nontraditional trademarks. My data indicates that this is not the case. Then, countries are attempting to harmonize to the standard of protecting nontraditional trademarks thinking that is required in the United States when it is not. In the end, this provides an amazing distraction to the greater goal of harmonizing trademark laws. Civil Law countries believe they are harmonizing to an international standard of trademark law when that standard is a fiction created by the United States (without malice). Instead of working on far more important goals that have remained elusive for 120 years and without concern to harmonizing the underlying theory of trademark protection, countries are focusing efforts on protecting the motion of a Lamborghini door. My argument is that this is unfortunate. We should understand the distinctions between the two systems and work to close that gap in a meaningful way. No matter how many countries protect the motion of a Lamborghini door opening, without harmonizing the underlying theory and without addressing real issues, real harmonization will remain elusiv

The Expansion Trajectory: Trademark Jurisprudence in the Modern Age

American trademark law is expanding. The expansion began with the adoption of the Lanham Act in 1947. At that time and ever since, commentators and law makers alike referred to the Lanham Act as a codification of the existing common law. In fact, this codification was a selection and expansion of the common law. The United States has continued to expand trademark jurisprudence: from incontestability, to cybersquatting, to dilution - the notion of what it means to protect a trademark has continued to expand. During this time, the Commerce Clause on which American federal trademark protection is based has not changed. The result of this inextricable expansion is that trademark jurisprudence in the United States is becoming muddled. Originally, trademark protection was justified as a right of exclusion that was granted to the user of a sign for their exclusive use for as long as they used it and to the extent they used it. Now, the trademark right has come to resemble the moral right of attribution andlor integrity of civil law copyright systems. This may be appropriate if the nation had a purposeful debate or discussion on turning the United States trademark system into a system of moral rights. However, no such discussion has taken place. Rather, Congress has enlarged the trademark right at the behest of special interests without paying attention to the consequences. One consequence is that trademark jurisprudence now has a striking resemblance to that of the protection offered by moral rights in civil law countries

Eighth Circuit Trademark Opinions

The Eighth Circuit Court of Appeals’ trademark jurisprudence has been truly fair and balanced since the 1946 passage of the Lanham Act. The court has created this fair and balanced jurisprudence by creating firm standards and sticking to them. Although not the most popular circuit in which to find a trademark case, the Eighth Circuit has kept a constant vigil to assure that trademark plaintiffs do not dominate over trademark defendants. This balanced approach to trademark law is consistent with the Minnesota Supreme Court, which recently held that “advertising injury” included trademark infringement, and therefore the defendant’s insurance carrier had to defend a trademark infringement lawsuit against it. The Eighth Circuit appears mindful of the need to maintain an even playing field so that trademark owners’ rights can be respected but trademark defendants’ ability to compete is not unduly burdened. This conclusion is supported by the heightened scrutiny of secondary meaning, the improbability of finding a trademark diluted, the strict standard on infringement, the consistent application of the incontestability doctrine, and by the data regarding reported success rates of trademark infringement cases. In the end, this article concludes that the Eighth Circuit’s trademark jurisprudence will lead to further and faster economic recovery than other circuits because the courts protect legitimate trademark rights but not at the expense of competition

The Illegitimacy of Trademark Incontestability

The concept of incontestability in American trademark law has caused great confusion ever since its adoption as part of United States trademark law in 1946. This Article is first a study of the rational basis for incontestability in American trademark law. The role of incontestability in the larger regime of American trademark law is established in order to understand incontestability as it fits within the history of the common law of trademarks. This is fundamental in order to understand the significance of the thesis that incontestability is illegitimate. Next, acquisition of incontestability is presented in order to show how simple it is to attain incontestable status and to put in perspective the resulting advantages. This also demonstrates the fact that incontestability is a radical departure from the common law of trademarks. This Article concludes with an analysis of trademarks themselves as property. Because the concept of incontestability was adopted without reference to the common law, and because it attempts to create property rights in a trademark itself, this Article concludes that incontestability is jurisprudentially illegitimate and should be repealed