Intellectual Property Law

Senate Bill Proposes Study on Trademark Bullies

By Michael Atkins

Sen. Patrick Leahy (D-Vermont) has introduced a bill that’s aimed at trademark bullies.

Or at least studying trademark bullies.

The bill, the “Trademark Technical and Conforming Amendment Act of 2010” (S-2968), arises out of Hansen Beverage Co.’s claim last year that Vermont-based Rock Art Brewery’s use of VERMONSTER in connection with beer infringed Hansen’s MONSTER trademark in connection with energy drinks. (Story on the parties’ Oct. 2009 settlement here.)

While the bill appears mostly to contain technical amendments, Section 4 directs the Secretary of Commerce to study and report to the Senate judiciary committees about “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.”

In Sen. Leahy’s words, “This legislation … requires a study of how the current system can better protect small businesses from abuses of the trademark system by larger corporations. Congress provides strong enforcement tools to intellectual property owners, as we should, to deter infringing activity and to remove counterfeit products from the market. I have become concerned, however, that large corporations are at times abusing the substantial rights Congress has granted them in their intellectual property to the detriment of small businesses. In fact, we saw a high-profile case like this in Vermont last year involving a spurious claim against Rock Art Brewery in Morrisville. When a corporation exaggerates the scope of its rights far beyond a reasonable interpretation in an attempt to bully a small business out of the market, that is wrong. This legislation therefore directs the Secretary of Commerce, in coordination with the Intellectual Property Enforcement Coordinator, to consider options for protecting small businesses from such harassing litigation, while ensuring that legitimate trademark infringement actions are handled efficiently and expeditiously by the courts.”

The World Trademark Review Daily wrote (free trial subscription required) about this issue on Feb. 16.

I got a couple quotes in the story, including: “Trademark bullies definitely exist. We’re seeing more and more trademark [lawsuit] filings but fewer and fewer trademark trials, which arguably suggests that trademark owners are using demand letters and trademark [lawsuit] filings to exercise their might and to extract something that they may not legally be entitled to by the court process.”

I also encouraged trademark owners to be judicious about who they make demands of. “All brand owners should think like small brand owners with limited resources. Brand owners should fight only legitimate battles that have realistic goals.”

Query whether anything will come of Sen. Leahy’s bill. It’s probably just a show of support for his constituent.

But maybe it will spark discussion about whether the Lanham Act should provide for the award of attorney’s fees to the party that prevails in a trademark infringement action. That’s what the study should focus on. 

Full post as published by Seattle Trademark Lawyer on February 22, 2010 (boomark / email).