Symbus has recently received significant press coverage for its defense of Kidstrong Enterprises in a trademark case filed by the Lance Armstrong Foundation. This is an important case because Kidstrong’s defense is based, in part, on allegations of “trademark bullying”—a trademark owner’s unreasonable interpretation of the scope of its rights for the purpose of intimidating an opponent into compliance with the owner’s demands. Trademark bullying has become a huge problem and the Kidstrong case may help shed some light on how the Patent and Trademark Office views the issue. We will provide periodic updates about the progress of the case in this space.
The typical trademark bully (generally a larger company) files a claim against a competitor (generally a smaller company), claiming a likelihood of confusion between marks containing common words, and this case is no different. As explained in a July 31, 2012 Business Wire press release, as well as numerous articles based on the release, Symbus is defending dietary supplement maker Kidstrong against a trademark opposition filed by the Foundation in the Trademark Trial and Appeal Board (the administrative law division of the Patent and Trademark Office). The Foundation opposed Kidstrong’s application for the trademark PROSTRONG after the mark was approved by the Patent and Trademark Office. The Foundation claimed that the PROSTRONG mark, which covers dietary supplements, is likely to be confused with and dilute the Foundation’s LIVESTRONG mark.
Kidstrong responded by claiming that the Foundation is engaging in trademark “misuse” and “unclean hands” by seeking to prevent Kidstrong from obtaining a trademark registration for PROSTRONG simply because the mark contains the word “strong.” Kidstrong also claimed that the Foundation is guilty of trademark “misuse” and “unclean hands” because of its efforts to stop numerous other companies from obtaining trademark registrations for marks containing the term “strong.” In a nutshell, the Foundation’s opposition and other enforcement efforts amount to an attempt to claim exclusive rights in the word “strong.” These efforts go far beyond any reasonable interpretation of the scope of the Foundations rights and qualify as classic case of trademark bullying. Surely, the Foundation has rights in its LIVESTRONG trademark, but do those rights encompass any use or registration of the word “strong”? The Foundation seems to think so, and that makes the Foundation a trademark bully. The Foundation should be commended for all of the good it does, but its trademark policies, like the trademark policies of other trademark bullies, are misguided.
As Janice Housey, one of Kidstrong’s lead attorneys, stated in the July press release, “The Lance Armstrong Foundation is one of the most prolific filers of trademark proceedings in the United States Patent and Trademark Office and I think many of its supporters would be dismayed by the pattern of conduct. We will continue our efforts to obtain a trademark for our client’s PROSTRONG beverage.”
A quick review of the TTAB’s records shows that the Foundation has filed dozens of oppositions against trademarks containing the word “strong.” There’s no way to know how much money the Foundation has spent on these oppositions, but since the Foundation tends to hire large law firms, it’s reasonable to assume the figure is fairly large.
More importantly, most of the targets of the Foundation’s enforcement efforts, including Kidstrong, are smaller companies. It goes without saying that this is the crux of the trademark bullying problem. Most trademark bullies go after smaller companies who generally don’t have the resources to fight larger, well-funded companies. The result is that these companies are generally forced to quickly surrender. More often than not, they wind up signing agreements that make them waste significant amounts of time and money destroying inventory, reprinting brochures, redesigning websites, adopting new trademarks, and/or developing new business plans. All of this stifles competition and discourages innovation.
Trademark bullying is also “economically inefficient” in law-and-economics parlance. The significant amount of money that larger companies spend defeating their smaller opponents increases their costs, and this results in higher prices and harms consumers.
Finally, as many victims of trademark bullying will tell you, it’s simply unfair to force a smaller opponent into submission by asserting an unreasonable interpretation of the law and then outspending the opponent. As Janice Housey noted in the above press release, “The attempt of a large organization with vast resources to assert a legal position with the primary goal of outspending a smaller company is objectionable on many levels. The Lance Armstrong Foundation engages in a pattern of conduct in which it attempts to intimidate many companies that legitimately seek to use the word ‘strong’ as part of a trademark.”
While trademark bullying has received an increasing amount of attention in recent years, unfortunately, there is very little case law on the subject since most trademark bullying cases settle. Stay tuned to see how the Kidstrong case develops.