'; Don’t Be a (Trademark) Bully: Tips and Considerations for Lawyers

Don’t Be a (Trademark) Bully: Tips and Considerations for Lawyers

September 9, 2015 Chicago Daily Law Bulletin

On August 7, 2015, Vista Outdoor Operations LLC filed a declaratory judgment action against Omega S.A. in the United States District Court for the Eastern District of Virginia. The complaint reads: “This case is a textbook example of ‘trademark bullying,’ where a trademark owner improperly attempts to assert trademark rights that extend well beyond the rights it actually owns.” The complaint details demands from Omega that Vista cease use of the OMEGA trademark in connection with tactical gear, protective clothing, and tactical equipment for military, law enforcement, and/or defense applications, including multiple Trademark Trial and Appeal Board oppositions, cease and desist letters, and the like, in light of Omega’s use of the OMEGA trademark for high-end watches.

Just 12 days later, on August 19, 2015, the Washington Post published an article titled: “Under Armour is suing pretty much every company using the name ‘Armor’.” The article focuses on a lawsuit filed in August by Under Armour against Armor & Glory, a small clothing company producing and selling athletic clothing with religious-based slogans. In an email shared with the Washington Post, Under Armour’s former attorney guaranteed “an expensive and time-consuming legal battle” should they continue to use the “Armor & Glory” mark. The article also discusses Under Armour’s objections to many marks containing “armor” – including Body Armor, Salt Armour, Ass Armor, and others. Despite the ongoing legal battle, the article concludes with a business “upside” – ever since the word has gotten out about the cease and desist letters, Armor & Glory’s business has “increased dramatically.”

What do these cases have in common? A concept that has been gaining attention and interest from brand owners and trademark attorneys not only in the United States, but also worldwide: trademark bullying. The USPTO defines a trademark bully as “a trademark owner that uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow.” Typically, the “bully” is a large entity with significant resources, and the “victim” is a smaller entity or individual without resources and thus more likely to give in quickly, even if they have a valid defense.

With the ubiquitous nature of social media, individuals and small entities receiving cease and desist letters have an easily accessible outlet to spread the word about the companies who send them those letters. Social media can be a democratizing news source. Once something goes viral, seemingly the whole world can know about one entity’s cease and desist letter in a matter of minutes. Then, trademark attorneys, other attorneys, and those with no legal training, including reporting popping up on your evening news, are all weighing in on whether or not a company should have sent a letter in the first place.

For example, Lagunitas Brewing recently filed a lawsuit against Sierra Nevada Brewing, over the use and display of “IPA” on Sierra Nevada’s bottles of Hop Hunter beer. Beer drinkers united on Twitter and contacted Lagunitas’ owner saying they would not be confused and objecting to Lagunitas’ apparent attempt at trademark bullying. One day after filing the lawsuit, Lagunitas’ owner agreed to drop the suit, and the objection, altogether. Quickly dropping the lawsuit did keep Lagunitas from facing an article in the San Francisco Chronicle titled “Beer lovers torpedo Langunitas lawsuit against Sierra Nevada”.

However, it can be hard to tell whether or not a particular situation is true trademark bullying. Trademark owners have an obligation to defend their trademark rights. If owners fail to police the use of their mark by third parties, they risk losing rights in the mark altogether. They also have an obligation to defend the space around their trademark, to ensure strong trademark rights and to deter potential infringers. Sometimes, this means sending letters to small entities or individuals who are infringing upon one’s trademark rights, and accepting the risks. It cannot be assumed that it is bullying when a bigger company enforces its rights against a smaller entity of sole proprietor. However, with claims of bullying more often going viral through social media, the label is in some instances being falsely applied where there are valid claims of trademark infringement.

In the age of social media, the first risk a company must weigh in sending a cease and desist letter is the risk of social media or public relations backlash. Under Armour and Lagunitas both saw social media campaigns spread over their trademark enforcement efforts. For another example, readers may remember a letter sent by Starbucks to the makers of a “Frappicino” beer, sold in a small brewery outside of St. Louis, Missouri. The brewers famously sent a check to Starbucks for $6, representing the total profits gained from sales of the beer at their brewpub. The letter and response went viral and Starbucks was labeled a “bully.”

The second risk a company must weigh is the risk that, not only will the letter go viral, but sales of the “infringing” product increase. The Washington Post reported that Glory & Armor has seen just such an uptick in sales thanks to coverage of their dispute with Under Armour. In another example, North Face sued South Butt, LLC over sales of shirts with the South Butt name and logo, which was considered by North Face to be rather similar to its name and logo. After word of the lawsuit got out, sales soared and you can still find people walking around with South Butt t-shirts and sweatshirts.

The third risk a company must weigh is the risk that the recipient will file a declaratory judgment action against them. This happened to Omega in its suit filed by Vista, discussed above. Spin Master, maker of the “Would you Rather?” game, faced a similar situation after the maker of the game app “You Rather” filed a declaratory judgment action after Spin Master threatened lawsuit.

A trademark owner seeking to mitigate its risks should consider its audience, do its due diligence, and carefully craft its cease and desist letter keeping in mind creative solutions. An example of such careful crafting and creative solution-making that went viral itself was a letter sent by Jack Daniel’s Properties Inc. to Patrick Wensink, who wrote a book whose cover looked rather similar to the Jack Daniel’s bottle label. The letter, written in a conversational tone, did not quote statutes but instead mentioned how Jack Daniels was “flattered” by the author’s “affection for the brand” and sought his help in defending the brand. Jack Daniels sought a change in the cover upon reprint and offered to contribute to the cost of changing the digital version promptly. Such a letter acknowledged the other party’s recognition of the trademarked brand, and turned the recipient into a partner in the process, rather than an adversary. It is hard to be called a bully when the trademark owner is creating new partners.