What Brand Owners and Small Businesses Can Learn from Backcountry.com’s Trademark Enforcement Campaign

By Erik Alsegard
January 11, 2020

“Backcountry.com’s actions clearly demonstrate how small businesses can be at a disadvantage at the threat of IP disputes. And because they often have a lack of resources and legal advice, in cases like these, smaller companies regularly find themselves with no choice but to cease trading or dramatically change their practices.”

https://depositphotos.com/24549783/stock-photo-business-problems.htmlU.S.-based online outdoor goods retailer, Backcountry.com, has faced a significant social media backlash over the past month, with both customers and competitors publicly reacting to its aggressive trademark enforcement campaign.

It all started when news broke that the brand had taken action against a huge number of smaller companies that happened to use the term “backcountry” in their names. Public documents revealed that Backcountry.com had been attempting to cancel trademarks against businesses using the term, filing lawsuits against a multitude of smaller companies over the past two years.

The impact was far ranging, with disputed trademarks, product and business names including American Backcountry, Backcountry Babes, Marquette Backcountry Skis, Backcountry Denim Co., Backcountry Nitro, Cripple Creek Backcountry and many more.

The effect of this was devastating for many small businesses. Several affected businesses reported feeling “threatened, bullied, and forced into certain results by Backcountry and its legal counsel.”

A number of brands were forced to halt trading, changed their names, or underwent a complete rebrand as a result. Even still, some owners and managers of these businesses faced hefty bills for legal representation and were affected professionally and personally by the legal battles in which they found themselves.

Why Does It Matter?

This action is a prime example of the IP threat that small businesses can face. While many business owners may feel that their existing trademarks offer immunity from the threat of legal action, this often isn’t the case. Many of the companies targeted by Backcountry.com did own their own trademark due diligence, but this didn’t stop them from being targeted.

Backcountry.com’s actions clearly demonstrate how small businesses can be at a disadvantage at the threat of IP disputes. And because they often have a lack of resources and legal advice, in cases like these, smaller companies regularly find themselves with no choice but to cease trading or dramatically change their practices.

IP infringement allegations tend to catch such businesses off-guard, as smaller organizations are often completely unaware that this is a risk for which they need to prepare. If a company doesn’t have the resources to defend itself against litigation, the costs of legal advice can quickly mount, leaving business owners struggling to reach the right decisions.

The Backcountry Backlash

Interestingly, in the Backcountry.com case, mounting public pressure resulted in a U-turn from the outdoor retailer. The plight of the small businesses was evident, and consumers were incensed by the brand’s actions, even launching a Facebook group calling for a complete boycott of the company. Twitter became swamped with hashtags including #boycottbackcountry, #backcountryboycott and #scrapethegoat, and consumers were quick to share their distaste via the brand’s official social channels.

As a result of the global outcry, Backcountry.com issued a public apology. The company cut ties with its legal partners at IPLA Legal Advisors and started to reach out to businesses affected by litigation to make amends. But what might have happened to the organizations affected by its trademark enforcement if the matter hadn’t caught the attention of the online community?

Whether an allegation of infringement is valid or not, the threat of this type of action is very real. Any company that finds themselves challenged by a bigger business with deeper pockets needs to have access to professional advice. There is no doubt that sometimes a company has infringed another’s IP and this needs to be addressed. In other instances, it may be right to challenge allegations of infringement, but doing so could require professional advisors, a good legal strategy and the financial position to be able to argue the case if necessary. This is where insurance coverage comes into its own.

The reality is, small to medium sized businesses don’t usually have their own legal departments ready and waiting to advise on IP litigation and trademark cancellation threats. But this doesn’t mean that they’re powerless to protect themselves from these very real risks.

Image Source: Deposit Photos
Image ID: 24549783
Copyright: BrianAJackson 

The Author

Erik Alsegard

Erik Alsegard has over 15 years’ insurance industry experience and leads CFC Underwriting’s Intellectual Property practice, the largest dedicated IP underwriting team in London. As Practice Leader, Erik is responsible for developing CFC’s suite of IP insurance products and services and educating brokers on the emerging class. He is also a sought-after commentator on IP risk. Erik began his career as a broker and previously held IP insurance underwriting roles at Munich Re and Miller Insurance Services.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 4 Comments comments. Join the discussion.

  1. Pro Say January 11, 2020 6:53 pm

    What Backcountry.com did was shameful.

    While it’s heartening to see the company do something far too rare in the corporate world — realizing, admitting, and apologizing for their mistake — it’s critical that they also drop all legal proceedings against others based on an unquestionably generic trademark which should never have been granted; especially for the product category in which they operate.

    If and until such time, the boycott should remain in place.

    Talk is nice, but action is what matters.

  2. TPH January 13, 2020 10:12 am

    I had a very similar case in which I represented a single location business with a name similar (but not identical to) to a trademark registered to, but rarely used in commerce by, a national firm in the same area of practice. As it happened the smaller company was a buyer of product from the national firm. In a policy similar to what you just described, the national firm sent the smaller company a demand letter insisting that it change its name based on alleged likelihood of confusion. We were retained on a Friday, and on Saturday my client placed a long and angry post on Facebook describing what had happened. By Sunday the large company’s Facebook site was being bombarded with angry comments and further comments were appearing on other social media sites such as Twitter. On Monday the matter was settled. I cannot say that I have ever seen anything like it. In that instance social media was very effective at resolving the dispute.

    That said, I would be very hesitant to recommend that a client use social media as a legal strategy. People interpret facts as they choose to see them, facts can quickly get distorted with repetition, there will postings going both ways, and online postings may be harmful to your client.

  3. Vicki January 13, 2020 1:01 pm

    This makes me wonder whether Backcountry had in-house legal counsel and whether their counsel was consulted before mounting such an aggressive, all-out attack, or whether this was something IPLA Legal Advisors proposed and Backcountry management just thought was a great idea, without questioning or otherwise thinking it through. And didn’t a partner at the firm vet these defendants before filing suit? Somebody’s got a lot of explaining to do.

    Social media is a powerful tool. Separated, little defendants feel helpless. But, if they were all represented by the same smart litigator, they would be a formidable army and Backcountry may not have been able to get these BS suits dismissed (and could be on the hook.) Backcountry should be relieved this didn’t happen to them.

  4. Gordon Firemark January 14, 2020 7:24 pm

    It strikes me (as a lawyer myself), that Backcountry’s lawyers overstepped.. they have/had an ethical duty to NOT raise claims that aren’t fully supported by the facts and law… and in many of the examples, they did so anyway… using threats, intimidation, and extortion-like measures to get smaller businesses to cave to the pressure, instead of standing for their legal rights. I’d say that a bar complaint may be in order. AND, shame on Backcountry for going along with the extortion campaign.

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