Tuesday, February 15, 2011

ABA Intellectual Property Law Section Weighs in on USPTO’s Trademark Misuse Study

On February 4, 2011, the Intellectual Property Law ("IPL") Section of the American Bar Association submitted its formal response to the USPTO's request for comments (initial request; final request) in support of the study mandated by Trademark Technical Amendments Act (Pub. L. No. 111-146). This study sought information regarding what the Trademark Technical Amendments Act and the USPTO characterized as the potential for small businesses to be disproportionately victimized by the "misuse" of a corporation's trademarks (with a strong implication that the dispute could be characterized as a "Golaith" taking advantage of a "David"). After the USPTO posted its initial request for comments, the Congress passed an amendment (the Copyright Cleanup, Clarification, and Corrections Act of 2010, Public L. No. 111-295) to the required study, de-emphasizing the large corporation versus small business focus that had characterized the initial study. This amendment removed the assumption that abusive litigation conduct in trademark cases occurred only at the hands of large businesses, but retained the assumption that only small businesses could be harmed.

The USPTO's final request for comments to the study required responses no later than February 7. In its letter, the ABA IPL Section reported that it had conducted its own study of its members and summarized the results. It also attached copies of the survey questions and responses for further evaluation by the USPTO. The study conducted by the ABA IPL Section suggests that the problem was not so one-sided, and that other parties in litigation could be harmed by a trademark owner's enforcement activities, but that a one-size fits all remedy "does not appear to be warranted." The letter further suggested that current sanctions (pursuant to Rule 11 of the Federal Rules of Civil Procedure) available for imposition by courts during litigation could be sufficient to remedy the harm and deter future bad conduct, provided that the Courts were willing to impose them in instances where the litigation conduct of one party in a trademark case qualified as abusive.

The ABA IPL Section further reported that some respondents felt that the USPTO's study overlooked the fact that property rights in trademarks are based on use in commerce and do not stem only from registration. It also seemed to overlook the trademark owner's enforcement obligations – even for common law marks which have not achieved registration (which can support litigation based on 15 U.S.C. § 1125). Failing to enforce one's trademark rights when required may result in a loss of rights to enforce the trademark against other potential infringers. Because there is no guarantee of success in litigation, the presumption that enforcing a common law trademark amounts to "misuse" is, therefore, flawed.

Prior Privacy and IP Law Blog posts about this topic:

* 11/28/10 Copyright Cleanup Bill Clears Congress for Signature by Pres. Obama

* 10/18/10 USPTO Seeks Comments on Potential Trademark Misuse

Neither statute requires that the USPTO publish the comments that it has received in response to its request, but the results of the study are due to be reported to Congress no later than one year after the enactment of Public Law No. 111-146, or by March 17, 2011. As a result, it is possible that we will see some level of detail about the survey results when the report is made.