Request for Comments: PTO Trademark Litigation Tactics Study

The United States Patent and Trademark Office is conducting a study relative to alleged abusive trademark litigation tactics and they want your comments.

The request for comments on trademark litigation tactics finds it genesis in The Trademark Technical and Conforming Amendment Act of 2010, which became effective on March 17, 2010. Pub. L. No. 111-146, 124 Stat. 66 (2010). The Act includes a provision requiring the Secretary of Commerce to conduct a study and report to the Committees on the Judiciary of the House and Senate on “(1) the extent to which small businesses may be harmed by litigation tactics by corporations attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner; and (2) the best use of Federal Government services to protect trademarks and prevent counterfeiting.” The study and report is to also include any policy recommendations deemed appropriate.

With the Department of Commerce being tasked with the study and report, it is no great surprise the responsibility has fallen to the Trademark Office.  As the study is ongoing, in connection with other efforts the USPTO would like feedback from U.S. trademark owners, practitioners, and others regarding their experiences with litigation tactics, especially those involving an attempt to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner. The USPTO is also eliciting suggestions to address any allegedly problematic litigation tactics.

The gist of many of the questions presented by the USPTO (see below) revolve around whether anyone in the government has a responsibility to do anything about aggressive trademark litigation tactics.  One questions specifically asks whether the USPTO has an obligation, another asks whether any agency has an obligation, still another asks whether the Courts have an obligation and yet another asks whether there is any obligation for Congress to act.  I personally am of the view that there is little that the USPTO or any agency of government could do.  I am also skeptical about whether the Courts have a role to play because based on my experience and anecdotal information I receive the real abuse comes with cease and desist letters and not through lawsuits.  Therefore, I don’t know what the Courts could do to dampen down the overblown dime-a-dozen threat letters that frequently have little or no merit and largely mischaracterize the law.

While the the Executive Branch and Judicial Branches likely have little or no role to play, the Legislative Branch could play a role.  I am not convinced there is any useful recourse for one to fight an overblown cease and desist letter, but there could be.  For example, if an attorney sends a letter that so severely mischaracterizes the law to the point where it is wrong there could and probably should be some kind of actionable harm realized.  It wouldn’t make sense for any one individual or business to seek redress, but if class action attorneys are good for anything shouldn’t they be good for collecting thousands of similarly situated individuals and businesses to go after the bullies who without legal justification use trademarks to coerce behavior they are not entitled to be demanding?

The stories of abusive cease and desist orders are legendary.  In fact such letters are indeed typically referred to as being “a dime-a-dozen.”  Trademark owners and their representatives have long been believed to grossly overstate the rights a trademark conveys when they send letters to unsuspecting and often legally unsophisticated individuals who are immediately petrified and will do nearly anything to resolve the matter.  These individuals and small businesses are frequently coerced to give up legal rights they have without justification, which alters their business plans without justifiable reason.

Those who don’t given in so quickly incur legal bills going to lawyers to learn about their rights, or lose all kinds of productivity researching on their own to try and figure out what they have to do.  Such over enforcement strikes me as clearly misuse of a trademark and is among the worst type of corporate bullying, at least in the intellectual property sphere.  Each action has an equal and opposite reaction, and the reaction to the dime-a-dozen cease and desist letters might as well be a private tax on productivity, not to mention the mental anguish it causes when Mom & Pop, Inc. receives a letter that reads as if their first born must be sacrificed at the alter to satisfy Giant Mega Corporation.

If anyone does wish to present information to be considered by the Trademark Office send your response, along with any additional or supporting information and comments, to [email protected], with the e-mail subject line of “Small Business Study.” The deadline for comments is Monday, February 7, 2011, so there isn’t much time. This just came to my attention today as I was reading the latest edition of Inventors Eye, the online magazine published by the USPTO on a bi-monthly basis and aimed at the independent inventor community.  The notice explains that to ensure your response is considered it should be submitted no later than February 7, 2011.  My guess is that many of those reading will be able to provide a quick response to one or more of the specific questions identified by the Trademark Office.

The USPTO says it would find it most helpful to receive responses to every question, but the call for comments itself seems to realize that could well be unrealistic.  So in an effort to receive any helpful information in the possession of the public the USPTO is interested in answers to all or any portion of the following questions:

1. Please identify whether you are a trademark owner or practitioner, and the general size and nature of your business or trademark practice, including the number of trademark applications and registrations your business has, or your practice handles. Please note that the USPTO will fully consider any comments you submit, even if you choose not to identify yourself in a particular manner.

2. In approximately the last 5 years, please describe any instances of which you have first-hand knowledge where a small business may have been the target of litigation tactics attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner.

3. Please describe situations where you have been involved in receiving a cease-and-desist letter. Anecdotal information might include, but is not limited to, a description of whether the letter resulted in the small business ceasing its use of one or more marks, or whether the sender of the cease-and-desist letter withdrew or abandoned its demands against the small business owner.

4. Please describe situations where you have been involved in trademark litigation in state or federal courts. Anecdotal information might include, but is not limited to, a description of whether the lawsuit settled on the basis of the small business agreeing to cease its use of one or more marks, or on the basis of the plaintiff withdrawing or abandoning its trademark-related allegation(s). Alternatively, relevant information might include whether such lawsuits resulted in a court judgment and the nature of the judgment (such as requiring the small business to cease its use of one or more marks, assessing monetary liability (damages, lost profits, or attorneys’ fees) against the small business, requiring the plaintiff to pay the defendant’s attorneys’ fees, or imposing sanctions against the plaintiff under Rule 11 of the Federal Rules of Civil Procedure).

5. Please describe situations where you have been involved in opposition/cancellation proceedings instituted at the USPTO against small business owners. Anecdotal information might include, but is not limited to, a description of whether the proceedings settled on the basis of the small business agreeing to abandon its application(s) for one or more marks, or whether the proceedings settled on the basis of the plaintiff withdrawing or abandoning its notice of opposition or cancellation petition. Alternatively, relevant information might include a description of whether such proceedings resulted in a decision by the USPTO Trademark Trial and Appeal Board (“TTAB”) refusing to register/canceling one or more marks owned by the small business, or whether such proceedings resulted in the TTAB imposing sanctions against the plaintiff under Rule 11 of the Federal Rules of Civil Procedure.

6. Do you think trademark owners currently encounter the problem of other trademark owners using their trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow? If so, how significant is the problem?

7. Do you think aggressive litigation tactics are more pervasive in the trademark area than in other areas of the law?

8. Do you think the USPTO has a responsibility to do something to discourage or prevent aggressive trademark litigation tactics? If yes, what should the USPTO do?

9. Do you think the U.S. courts have a responsibility to do something to discourage or prevent aggressive trademark litigation tactics? If yes, what should the U.S. courts do?

10. What other U.S. agencies may have a responsibility to do something about the problem?

11. Do you think Congress has a responsibility to do something to discourage or prevent aggressive trademark litigation tactics? If yes, what should Congress do?

12. Please provide any other comments you may have.