Avoiding the Black Eye of Being Labeled a 'Trademark Bully'

John E. Petite

Corporate Counsel

02-11-2013

Trademarks are designed to foster a company's reputation and goodwill. To safeguard that goodwill and preserve their trademark rights, trademark holders must adequately police their marks. Increasingly, though, individuals and small businesses accused of infringement are using social media campaigns to label legitimate trademark enforcement as "trademark bullying."

In some instances, these David vs. Goliath stories have attracted national headlines with potentially devastating public relations effects for the trademark owner's brand value and reputation, a phenomenon at odds with the very aims of trademark enforcement. In this environment, trademark holders and their counsel should carefully consider how to police their marks—while lessening the likelihood that they will be labeled a trademark bully.

If trademark holders do not police the market and stop unauthorized third-party usage, the strength of their mark, and its corresponding value, will be diluted as similar marks crowd the marketplace and reduce the distinctiveness of the original mark. While vigilant enforcement is especially critical for the holders of "famous marks"—marks so distinctive and widely recognizable that they rise to the level of "household names"—even holders of marks that do not qualify as "famous" must diligently police their marks.

Ultimately, if confusingly similar third-party usage becomes widespread, the mark may lose its distinctive quality and perhaps even fall into the public domain, effectively stripping the trademark owner of his or her rights. BellSouth. v. DataNational (Fed. Cir. 1995). Marks that are not inherently distinctive—and thus are inherently weak, but have acquired distinctiveness based on extensive advertising—are particularly prone to losing strength or, worse, any protectability at all, as a result of third-party usage.

In the past, trademark enforcement rarely attracted the public eye. Now, accused infringers increasingly air their grievances on social networks and court mainstream media coverage. Accused infringers pressure trademark holders to back down from their claims by painting them as deep-pocketed bullies who, through threats of ruinous litigation, extract unfair settlements from the "little guy."

One prominent example involves Chick-fil-A's attempt to stop Vermont artist Bo Muller-Moore from using the mark "Eat More Kale." In 2001, Muller-Moore made T-shirts with the slogan as a favor to a local kale farmer, and had been selling them a handful at a time ever since. When Muller-Moore tried to register "Eat More Kale" with the U.S. Patent and Trademark Office, Chick-fil-A sent him a cease-and-desist letter stating that the proposed mark infringed on Chick-fil-A's mark, "Eat Mor Chikin."

Muller-Moore began a social media campaign against Chick-fil-A. More than 37,000 people signed a petition chastising Chick-fil-A for "corporate bullying." Nearly 2,000 people donated money, raising over $87,000 for Muller-Moore's legal defense fund. The New York Times, The Economist, and numerous other media outlets championed Muller-Moore's cause, and expressed disbelief that anyone could confuse "Eat More Kale" with Chick-fil-A's efforts to sell chicken sandwiches. This negative coverage resulted in Chick-fil-A being viewed as overreaching.

In reality, while Chick-fil-A claimed "Eat More Kale" confused consumers, Chick-fil-A also claimed "Eat More Kale" diluted its famous mark, "Eat Mor Chikin." Unlike the classic trademark infringement case, owners of a famous mark can enjoin use of a mark that impairs the distinctiveness of the famous mark ("blurring") or harms the reputation of the famous mark ("tarnishment"), even when there is no competition between the goods promoted under the marks and consumers are unlikely to confuse them. 15 U.S.C. § 1125(c).

If Muller-Moore were allowed to register "Eat More Kale," next might come "Eat More Tofu," then "Eat More Turkey," and so on until the distinctiveness of "Eat Mor Chikin" was substantially diminished. Though this point was not addressed in the media, Chick-fil-A vigorously pressed its dilution claims before the USPTO, which preliminarily denied Muller-Moore's registration. The goodwill associated with Chick-fil-A's mark, however, was clearly harmed by continued negative publicity, despite what appears to be legitimate trademark enforcement. Consequently, Chick-fil-A's enforcement action, designed in part to preserve goodwill, actually diminished it.

This new reality puts trademark holders in a difficult position. Policing at the outer edges of trademark rights increases the risk that an accused infringer will embark on a campaign to shame the trademark holder and sully its good name. On the other hand, failing to police the borders of your trademark rights potentially allows unauthorized uses of conflicting marks to progressively erode the strength of your mark. 

Ultimately, trademark holders must enforce their trademark rights, but they must do so in a way calculated to minimize the risk of negative publicity and avoid counterproductive enforcement actions. Initially, trademark holders should consider whether enforcement in a given case is necessary. Historically, trademark owners considered hyper-vigilant enforcement essential to preserve their rights, erred on the side of over-enforcement, and typically sought to enjoin even peripheral uses that did not strike at the core of their businesses.

Today, however, sending a cease-and-desist letter in a tenuous case is more likely to cause an accused infringer to resort to public shaming—and if done often enough, it probably will. For holders of non-famous marks, this means evaluating, with a truly discriminating eye, all factors considered in a classic infringement claim. Although holders of famous marks must be more aggressive, and cannot ignore non-competitive uses, calculated enforcement is still better than indiscriminate enforcement.

When trademark holders act, they should consider the optics of how they object to the infringing action. Sometimes, something more proactive than a cease-and-desist letter may be necessary. For instance, in 2009, McDonalds sought to prevent a teenager, Lauren McClusky, from calling her charity event "McFest." McDonalds' actions, predictably, prompted a public outcry. Only then did they move towards settlement. Given the likelihood of a negative public reaction, a proactive effort to settle the matter immediately, perhaps even with a token charitable contribution, could have suited McDonalds' interests, protected its trademark rights, and avoided the negative publicity altogether.

Further, trademark holders should consider the tone and content of their cease-and-desist letters. Historically, cease-and-desist letters used extremely strong and threatening language, designed to impress upon the infringer the serious consequences that could flow from their actions. While that may be appropriate in instances of willful infringement, harsh language directed at a sympathetic "mom and pop" infringer could backfire. An even-handed and courteous explanation of why you believe your trademark is being infringed can work just as well, if not better.

The U.S. Olympic Committee (USOC) found this out the hard way when it sent an aggressive cease-and-desist letter to Ravelry—a social network for knitting enthusiasts—that suggested Ravelry's use of the term "Ravelympics" showed a lack of respect for Olympic athletes. In response, the USOC was deluged with angry letters and emails from Ravelry's nearly two million members. Although Ravelry stopped using the term, the USOC was forced to publicly apologize—twice! Using a softer tone can thus pay huge dividends if the letter is featured in a social media campaign about, or conventional media coverage of, your enforcement efforts.

Additionally, cease-and-desist letters often demand that the accused infringer take immediate and dramatic action, such as destroying all goods, packaging, labels, and signage bearing the infringing mark, providing an accounting of profits, etc. In some cases, these demands make sense; in others, they may not. The goods involved may be of such little volume, or the resemblance to your mark so slight, or its relevance to your core business so remote, that their impact on the strength of your mark is negligible. For a small company, however, the monetary and emotional cost of destroying those materials could be substantial. The infringing "little guy" may ignore your letter and take his case straight to the court of public opinion.

If the risk to the continuing vitality of your mark is minimal, it makes little sense to risk negative publicity over an enforcement action that was barely worth pursuing in the first place. Instead of demanding immediate destruction of all infringing materials, it may make more sense to immediately offer to combine a phase-out of the infringing mark in exchange for a promise to stop using the conflicting marks thereafter. Even a lengthy phase-out can still protect your trademark rights. Not only is this more likely to result in compliance, but it is also more likely to avoid a public opinion backlash.

Finally, trademark holders should consider using cease-and-desist letters not only as a demand that the infringement stop, but also as a way to politely explain how infringement hurts the trademark holder and why they must take action. This is precisely what Jack Daniel's did when it learned that the cover art for Patrick Wensink's book, Broken Piano for President, resembled a Jack Daniel's label. Jack Daniel's cease-and-desist letter explained: "If we allow uses like this one, we run the very real risk that our trademark will be weakened. As a fan of the brand, I'm sure that is not something you intended or would want to see happen." Jack Daniel's politely requested that Wensink change the cover art when the book was reprinted, and Wensink obliged.

Such an explanation may be especially important when famous marks are involved. As in the case of Muller-Moore and Chick-fil-A, the infringer may not initially comprehend how a slogan that is unlikely to confuse customers could still negatively affect the trademark holder. If they understand this connection, they may not like what's happening, but at least they are less likely to malign your company.

Ultimately, the best tactics for avoiding negative publicity while still preserving and protecting trademark rights must be tailored to suit each client, each infringer, each product, and each circumstance. Trademark holders must police their trademarks and root out infringement, but in today's unique climate, they must be ever mindful not to destroy the very thing that trademarks are meant to preserve: a company's reputation and goodwill.

John E. Petite is an officer in the litigation practice group at Greensfelder, Hemker & Gale in St. Louis, where he represents clients in general commercial litigation, with an emphasis on intellectual property litigation (trademark, copyright, and trade secrets). Reach him at 314-516-2698 or jep@greensfelder.com. Mr. Petite would like to thank Greensfelder attorney Michael A.T. Schwalbert for his valuable contribution to this article.