Brand Protection Today Article 5: You Found a Problem, Now What Do You Do? (Part 2)

Brand Protection Today – A Series from InfoLawGroup

At InfoLawGroup, we recognize that communication technology is changing at a furious pace and the need to protect brands is greater and more complicated than ever. We deal with these issues in our daily practice and are sharing insights in this multi-part series on Brand Protection. Please subscribe HERE to receive InfoLawGroup Insights.

Brand Protection Today

Article 5: You Found a Problem, Now What Do You Do? (Part 2)

by Rosanne Yang and Sara Skinner Chubb

Welcome back to our ongoing series on brand protection! In weeks one through four, we covered selecting your mark, tools to monitor and protect your mark, running your brand protection program, and evaluating potential problems that you find in the market. This week we pick up at the point where you’ve decided to go after an infringing use of your mark. There are a variety of enforcement mechanisms available to you, some of which depend on the manner of infringement.

Determine the Best Form of Action

There are various avenues available to enforce your legal rights, and proceeding straight to court is rarely the best or most efficient course of action. In this section, we explore several common enforcement mechanisms and considerations for each. Before we get started, you should note that these enforcement mechanisms are not necessarily exclusive of one another, so you can switch strategies in many instances. And your opponent can force a switch in strategies by taking you to court over your claims or enforcement actions.

Third Party Platform Policies and Actions (“Take Downs”)

If the offending use appears on a third-party platform, there may be platform processes and mechanisms to take down the content at issue with little drama. Most social media platforms maintain acceptable use policies such as Facebook’s and Instagram’s Community Standards or YouTube’s Community Guidelines. These policies prohibit deceptive practices, including impersonation, and require users to respect the intellectual property rights of others. Perhaps more importantly, they also provide mechanisms to report violations of their policies and have offending content restricted or removed.

Online marketplaces like eBay, Amazon, and Facebook Marketplace also provide mechanisms to report the sale of counterfeit goods, gift cards, and coupons.

Platform-provided take down procedures can be a practical way, and cost and time efficient way, to address infringing activity. Just be sure that you are using the take down procedures appropriately – they are not intended to resolve non-infringing activity. Improper claims can disrupt your brand’s activities on the applicable platform if your claims are abusive and could otherwise result in liability to the company.

Cease and Desist Letters (“C&Ds”)

A step up from take down procedures, and available for use in just about any circumstance, is the cease and desist letter, affectionately known as the “c&d.” It requires direct interaction with the infringer and can swing broader than a takedown notice. The common elements of a c&d are: communication of your rights, description of infringing activity, demand that the recipient cease the challenged activity, and – often – a demand for further information.

Have some realistic expectations around this enforcement mechanism. Rarely does an infringer immediately wave the white flag and acknowledge the awesome power of your argument. A c&d is instead often the starting place of a discussion, and sometimes, ignored. So, know what your game plan is, and what your exit strategy is.

There are a couple of dangers in sending c&ds. First, if written too strongly, they can be used as the basis for the recipient to go to court seeking a declaratory judgment that they are not infringing your brand. Second, if there is no response and no change in behavior, you’ve established the starting date of when you became aware of the activity, and if you do not take further action to address it, you may lose your ability to do so later, through the legal doctrine known as “laches” (the idea that if you sit on your rights too long, you may lose your right to take action) and/or a statutory limitation of time to pursue an issue.

Alternative Dispute Resolution (“ADR”)

For domain name disputes, there are two types of alternative dispute resolution available: the Uniform Domain Name Dispute Resolution Policy (UDRP) for .com and most of the other generic Top-Level Domains (gTLDs) and country code TLDs (with variations for some of them) and the Uniform Rapid Suspension System (URS) that is an option for the newer TLDs such as .shop, .online, and .site. These are proceedings similar to court litigation in that you file a formal claim, the opposing side has a chance to file theirs, and an experienced adjudicator or panel of adjudicators determines the outcome. However, they are conducted online and they are faster, far less expensive, and do not involve the normal trappings of litigation such as hearings, discovery, and briefing.

URS is a quicker and cheaper procedure than UDRP in that it takes a little over two weeks instead of about two months. However, URS only works for “slam dunk” cases where there is a word mark that is currently registered or has been validated by a court or specifically protected by statute or treaty, unlike UDRP, which can also protect unregistered marks and design marks that include words. In URS the respondent’s bad faith must be established to a higher degree of proof than in the UDRP. URS proceedings do not result in transfer of the domain to the trademark owner – just in temporary suspension of the domain until the registration is set to expire (the complainant can pay for one additional year of suspension). By contrast, a UDRP complainant can ask for transfer or cancellation of the disputed domain name. Legal counsel experienced in domain disputes can help you determine the best enforcement mechanism for the offending domain.

In addition, the Copyright Office is working toward an ADR process for low dollar value copyright infringement cases, and that is expected to become available about a year from now.

Trademark Trial and Appeal Board (“TTAB”)

When your issue is with a pending or registered trademark, you may be able to challenge it in the United States Trademark Office. Not all applications or registrations can be challenged in this way, but at the appropriate time, TTAB proceedings can offer good leverage to address a potential issue. TTAB proceedings are very much like court proceedings, in that they follow (most of) the Federal Rules of Civil Procedure and the Federal Rules of Evidence, which govern how federal court litigation is conducted too. The proceedings permit discovery, expert testimony, and accommodate a variety of motions very much like traditional litigation.

Unlike court proceedings, the result is determined by the USPTO itself, and its power is limited to whether or not to allow registration. The USPTO cannot address the use of the challenged mark in the marketplace, nor can it award the winning party monetary damages. Still, a party who loses in the TTAB is unlikely to continue using the mark, so there are in many cases practical benefits that extend beyond blocking or cancelling the registration of the challenged trademark.

Trademark is a function of national law, and similar opportunities to object to pending applications and challenge registrations are available in jurisdictions outside the United States in markets where your brand is in circulation or where you plan to introduce it. It can be very helpful in those proceedings to point to a reasoned opinion in your favor from the TTAB.

Litigation

Sometimes, going to court is the best option, but it is not for the faint of heart. While you may be able to scare the other side enough by suing to get a fast settlement, or get a court to halt infringing activity quickly by petition for a temporary restraining order or preliminary injunction, that is not something that can be counted on. It’s not like it is on TV where things wrap up neatly in a matter of days. Litigation is most often a long, hard slog. Costs quickly reach a half million or more dollars just in attorneys’ fees, and because it sometimes takes years of litigation to get to a resolution, those attorneys’ fees – not to mention the fees for electronic discovery and similar expenses – just keep mounting. Before starting down this path, be sure your finance team and management team are on board.

Is It Worth It?

So now you’ve completed your analysis and determined your challenge is on solid legal ground. You have buy-in from your business stakeholders. You’ve worked with your legal counsel to lay out a strategy and identify the course of action(s) that best suit your goals and resources. Before you put the finishing touches on your cease and desist letter or file your initial complaint, take a moment to consider whether taking action is worth it from a financial and reputational perspective. As we’ve discussed, litigation and other options for legal recourse are costly and the time and financial outlay to extract your business from a legal dispute can be significant should you determine it ultimately “isn’t worth it.”

As we’ve discussed throughout this series, your brand is an irreplicable asset and protecting it is paramount (especially since certain rights must be enforced in order to preserve them). However, there may be instances where pursuing the offending activity doesn’t make sense from a financial perspective. Consider, for example, a situation where gray market goods in far flung jurisdictions bring in more money from the original US sales than can reasonably be generated from legitimate trade channels. Or perhaps a situation where your competitor’s infraction – while real – is not particularly damaging to your brand in the grand scheme of things. Do you expend the cost to pursue the wrongdoers or cautiously look the other way?

Ultimately, the decision on whether and how to proceed is personal to the business, but collaboration between experienced legal counsel and business stakeholders will develop a strategy that best meets the needs of your business and your brand. Join us next week as we discuss how to use the UDRP effectively to protect your brand.

Originally published by InfoLawGroup LLP. If you would like to receive regular emails from us, in which we share updates and our take on current legal news, please subscribe to InfoLawGroup’s Insights HERE.