Trademark Bullies to be Studied

October 18, 2010

Earlier this year, Congress passed and President Obama signed the Trademark Technical and Conforming Amendment Act of 2010. While most of the bill dealt with technical aspects of trademark law, Senator Leahy of Vermont included a provision in the Act requiring the Secretary of Commerce to “study and report to” Congress on “The extent to which small businesses may be harmed by litigation tactics attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner.” This provision has become know as the “trademark bullies” provision.

It was included in the bill at the behest of Senator Leahy as a result of his concerns that a Vermont brewer, Rock Art Brewery, was being targeted by Hansen Beverage Company, the producer of Monster Energy Drink, because of Rock Art Brewery’s production of VERMONSTER beer. In September 2009, Hansen Beverage Company had sent Rock Art Brewery a letter demanding that Rock Art cease and desist its use of VERMONSTER as a trademark for beer claiming it infringed on Hansen’s MONSTER ENERGY trademarks.

Hansen is a multi-million dollar beverage corporation with a reputation for claiming excessively expansive trademark rights. Rock Art Brewery is a small brewing company owned by a husband-and-wife team based in Vermont. Instead of yielding to the big corporation, which is what most small business are forced to do, Rock Art Brewery fought back. By using the Internet, it was able to generate a massive negative publicity storm against Hansen, which resulted in a settlement agreement that allowed Rock Art to continue its use of VERMONSTER with its beer.

The study that was birthed by the Rock Art controversy is now beginning. The United States Patent and Trademark Office (USPTO) is looking for comments from small business trademark owners and others on “the extent to which small business 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 other words, the USPTO is looking for the impact of trademark “bullies” on small business.

Specifically, the USPTO is asking that commenters address the following points:

  1. Are you a trademark owner and if so what is the general size and nature of your business and the number of trademark applications or registrations your business has (Note: the USPTO will consider your comments even if you don’t identify yourself in any particular matter).
  2. Whether in the last five years your business has 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 (i.e., whether you have been the subject of trademark bullying).
  3. A description of any situation where your small business has received a cease-and-desist letter. This can include anecdotal information concerning the outcome such as whether the letter resulted in your 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 your small business.
  4. A description of any trademark litigation in state or federal court in which your small business has been involved. This can include anecdotal information concerning the outcome such as whether the lawsuit settled on the basis of your business agreeing to cease its use of one or more marks or settled on the basis of the larger business withdrawing or abandoning its trademark-related allegations, or whether the lawsuit resulted in a court judgment and the nature of such judgment.
  5. A description of situations in which your business has been involved in opposition/cancellation proceedings instituted at the USPTO. Again, provide anecdotal information concerning the outcome such as whether your business agreed to abandon its application for one or more marks or whether the proceedings settled on the basis of the larger business withdrawing or abandoning its notice of opposition or cancellation petition.
  6. Whether you think “trademark bullies” are currently a problem for trademark owners, and if so, how significant is the problem?
  7. Whether you think aggressive litigation tactics are more pervasive in the trademark area than in other areas of the law?
  8. Whether you think the USPTO has a responsibility to discourage or prevent trademark bullying? If yes, what should the USPTO do?
  9. Whether you think the U.S. courts have a responsibility to do something to discourage trademark bullies? 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. Whether you think Congress has a responsibility to do something to discourage or prevent trademark bullying? If yes, what should Congress do?
  12. Provide any other comments that you may have.

If your business has been the subject of what you feel are unreasonable tactics by a trademark owner, this is your opportunity to speak up. Comments should be sent to the USPTO at [email protected] no later than January 7, 2011.