Is Your Small Business Being 'Trademark Bullied'?

Raj Abhyanker is a U.S. patent attorney and the founder of Trademarkia, a free search engine for trademarked logos, names and slogans.  And, as the co-founder of AOLClassifieds.com and MacInsider.com, he knows a thing or two about well-known trademarks. Abhyanker tells BusinessNewsDaily what trademark bullying is, how it affects innovation and what small business owners can do to protect themselves from it.

BusinessNewsDaily: Can you explain what trademark bullying is?

Raj Abhyanker: Trademark bullying is a term used to describe a scenario where a trademark owner, usually a large and resource-rich corporation, employs legal means to prevent others from using trademarks that could potentially cut into the market share of the trademark owner. Trademark bullying is limited to cases where the claimed trademark infringement or dilution is outside of any reasonable interpretation of trademark law or the trademark owners’ rights. Essentially, a trademark bully uses threats of litigation against another person who is clearly and beyond any reasonable doubt operating within the bounds of trademark law. 
Trademark bullies use trademark law as camouflage as they basically try to drive competitors out of business. They accomplish this by threatening to sue. Trademark bullies are well aware of the fact that many small competitors cannot afford the costs associated with of prevailing in court at the end of an enduring litigation. Bullies count on the fact that instead of fighting back, small companies will cease their operations or abandon usage of their trademark. 

BND: What advice can you give small business owners on how to protect themselves from trademark bullying?

R.A.: There are a number of measures companies can take to protect themselves from trademark bullying:

  • Companies should take extreme care when deciding on the mark they want to register. Conducting a thorough search of any similar marks prior to filing a trademark application can limit future legal conflicts.
  • Trademark owners should familiarize themselves with the basics of trademark law. Even a superficial understanding of basic trademark concepts can be enough in order to discern whether a legal action arises out of a legitimate claim or out of an owner’s unreasonable interpretation of their rights. An ability to recognize when one is being bullied is critical to thwarting a bullying attempt. Therefore, individuals should accumulate the trademark knowledge needed to identify bully attempts.
  • Individuals should not automatically back down in the face of a bullying attempt. Many trademark enforcement actions are commenced without a deep inquiry into the facts. Therefore, if one shows a desire to refute an infringement or dilution claim, a bully is more likely to abandon the enforcement action. 
  • Offering to use alternative dispute resolution services, such as mediation or arbitration, can reduce the costs of defending one’s trademark use. 
  • Evaluate whether it would make sense to offer to sell your mark to the people or company that want you to stop using it. But do not accept lowball offers to settle.
  • Use free online resources to find out the results of any previous similar actions taken by the company who is threatening you, against others with marks similar to yours. If others prevailed against the bully, your odds of prevailing are improved.
  • Wait until your mark is registered, not just filed, before investing large sums of money in marketing, branding or manufacturing with the mark.
  • Publicize the wrong. Get your customers and the public on your side. There are examples of bullies who decided to abandon their enforcement action due to the negative publicity it generated.

BND: How important is the trademark in terms of a company’s success?

R.A.: The answer to this depends on the nature of the industry in which the mark is being used. In commodities, for example, a unique trade name may not be an important consideration in the customers’ purchasing decisions. If however, one is an in industry dealing in specialty items, then using a trademark to create distinctiveness is important. The more businesses need to separate themselves from the pack, the more important having a distinguishable trademark becomes.

BND: What is the negative impact of trademark bullying on small businesses?

R.A.: Trademark bullying hampers small businesses’ ability to compete in the marketplace. Many small business owners are deterred from penetrating a new market, launching a product or using certain advertising methods out of fear of facing legal action. If, for example, one seeks to introduce an MP3 player to the market, but knows that he is likely to face legal action from Apple or any other big MP3 player manufacturer, he is much less likely to do so. 

BND: How has social media contributed to trademark bullying?

R.A.: Social media has impacted trademark bullying in a couple of different ways.  First, social media gives people a way to fight back against trademark bullying.  People utilize social media to publicize what they perceive to be an injustice against them. Wary of receiving negative attention on social media outlets, companies must avoid trademark enforcement action that will lead to negative publicity.

Social media also makes it easier to infringe on trademarks. It is not very difficult for individuals to misrepresent themselves as others. Social media makes it easier to someone to claim to be a representative of a company, when in fact they bear no affiliation with such company. This practice has alerted companies to the fact that they need to be vigilant when it comes to enforcing their trademark on the Internet, and social media sites in particular. A company’s reputation can easily be tarnished by way of the misrepresentation of another. 

BND: How has trademark bullying impacted innovation?

R.A.: Simply put, trademark bullying impedes innovation. As I mentioned in the question above referencing small businesses, individuals are deterred from innovating because of legal threats. Trademark bullies are an additional bar to entering the market. It is very costly to withstand legal challenges to trademark use.  Thus, only companies who are confident that they can absorb such legal costs proceed to introduce their products into commerce. Other companies, who may still have a viable product, are forced to drop a venture if they know their balance sheet will not be able to absorb legal costs that can easily run into the hundreds of thousands. 

As fewer companies enter the marketplace, innovation and innovative thinking is reduced accordingly. Less competition allows large companies to profit from their existing products for longer periods of time, thereby reducing their need to engage in innovation. 

BND: What responsibility does the USPTO (United States Patent and Trademark Office ) have to prevent trademark bullying?

R.A.: As it stands right now, it is unclear whether the onus should be on the USPTO to police trademark bullying. Whether they have the capability is also unclear. Some say that legal battles favor those with deep pockets, and nothing short of an overhaul of our entire legal system can change that. 

However, I do believe that there are some steps that the USPTO can take to mitigate the problem of trademark bullying. They recently asked for comments from the public regarding trademark bullying. This is a good place to start. From some of the submitted comments that I’ve seen, I believe that the USPTO will grow to be more aware of trademark bullying and will hopefully begin to formulate ways to mitigate it.