Monday, October 31, 2011
Common Questions: When Should I Enforce My Trademark Rights?
The short answer is: as soon as possible after you learn about potential infringement.
In the current economy, some trademark owners may be reluctant to incur litigation costs or to pursue enforcement actions against potential infringers, when they believe the cost of pursuit might outweigh the potential value of a license agreement or a settlement with the other party.
If trademark owners delay enforcing legitimate rights, however, they risk losing the ability to enforce their rights because of the delay. There are risks associated with a decision to not enforce the rights against a particular infringer, or to delay enforcement (generally). In other words, the trademark owner's claims could be dismissed for failing to take corrective action promptly.
There are three basic doctrines that result in a loss of enforcement ability, if they are alleged successfully: acquiescence, laches and/or waiver. These three doctrines usually appear as affirmative defenses to an infringement lawsuit when trademark owners try to sue a specific infringer.
Acquiescence occurs when a trademark owner exhibits some measure of agreement or implied consent to a potential infringer's use of a substantially similar mark. See, e.g., Profitness Phys. Ther. Center v. Pro-Fit Orthopedic and Sports Phys. Ther. P.C., 314 F.3d 62, 67 (2d Cir. 2002) ("The elements of acquiescence are: (1) the senior user actively represented that it would not assert a right or a claim; (2) the delay between the active representation and assertion of the right or claim; and (3) the delay caused the defendant undue prejudice.") (internal quotations omitted); Bunn-o-Matic Corp. v. Bunn Coffee Service, Inc., 88 F. Supp. 2d 914, 925 (C.D. Ill. 2000) ("To establish acquiescence, Bunn-NY must show that Bunn-IL by word or deed conveyed its implied consent to Bunn-NY's use of the Bunn mark."). This implied consent can come in the form of refusing or declining to file suit against a specific infringer or failing to otherwise object to an infringing use of the mark.
Laches is defined as "neglect to assert a right or claim which, taken together with lapse of time and other circumstances causing prejudice to adverse party, operates as bar in court of equity." Black's Law Dictionary. In other words, the delay caused harm to the defendant, and thus bars the owner's ability to sue the defendant for infringement.
In order to get a case dismissed successfully under a laches theory, a defendant is not required to prove any intent to consent to the defendant's specific use. Bunn-o-Matic Corp. v. Bunn Coffee Service, Inc., 88 F. Supp. 2d 914, 925 (C.D. Ill. 2000) ("Laches does not require proof of intent. . . . To prove laches, Bunn-NY must show (1) an unreasonable lack of diligence by the party against whom the defense is asserted and (2) prejudice arising therefrom."). Compared to acquiescence, where a defendant must show implied consent of a trademark owner, "laches implies a merely passive consent." Profitness Phys. Ther. Center v. Pro-Fit Orthopedic and Sports Phys. Ther. P.C., 314 F.3d 62, 67 (2d Cir. 2002) (citations omitted).
Finally, a defendant can assert that a trademark owner waived its right to sue for infringement in this specific case. Wavier generally requires "the intentional relinquishment of a known right." U.S. v. King Features Entm't, 843 F.2d 394, 399 (9th Cir. 1988). However, waiver is harder to prove than either acquiescence or laches because "it involves not sleeping on one's rights but intentionally relinquishing them." RE/MAX Int'l, Inc. v. Trendsetter Realty, LLC, 655 F. Supp. 2d 679, 711 n.12 (S.D. Tex. 2009). It also requires supporting evidence that "so clearly" indicates an intent to relinquish a known right that any other reasonable explanation is simply excluded. Allstate Fin. Corp. v. Dundee Mills, Inc., 800 F.2d 1073, 1075 (11th Cir. 1986).
Failure to oppose a junior user's similar trademark or simply failing to enforce one's own trademark rights in a timely manner can result in an inability to pursue infringement remedies against others. It can result in consumer confusion about the source of goods or services provided in connection with the similar marks, and undermine the value of the trademark owner's brand.
Because trademark owners necessarily have invested money and resources in developing their brands, and the consumer's good will associated with those brands, it's good practice to ensure that some enforcement mechanism is in place to protect these valuable assets. Trademark owners generally should avoid positioning themselves in any way that causes these defenses to become viable means to dismiss the lawsuit they've chosen to pursue.
(Note that there may be many reasons why enforcement of a trademark at a particular time should or should not be undertaken, each of which should be reviewed carefully with your attorney(s) in the context of the circumstances presented.)