Online Exclusive: Trademark Squatting Sees Global Increase
Starbucks had an identity crisis. Back in the early 2000s, the company was itching to open up some stores in Russia. But it couldn't do so under its famous brand name because Sergei Zuykov, an attorney with no affiliation to Starbucks, had registered the company's trademark in Russia.
In most foreign countries, anyone can register a trademark simply by filing a trademark application. And once the mark is registered, the legitimate brand owner is in trouble. The brand owner will have to fight for years and pay some hefty legal bills in order to get the registration canceled, if it does get canceled. The only other alternative is to pay off the trademark squatter.
For many years, however, U.S. law effectively discouraged trademark squatting. Here, unlike overseas, trademark rights arose only from using the mark, not from simply filing a trademark application. One had to sell or ship goods bearing the mark in interstate commerce in the U.S. in order to obtain a federal registration of the mark. Squatters didn't want to go through the time and expense of doing this.
In the Geisha case, for instance, New York resident Roy Tuccillo filed an ITU application for "Japonais" as a mark for restaurants, nine months after Geisha opened its "Japonais" restaurant in Chicago to widespread acclaim and coverage by the national media. The PTO approved the ITU application and gave Tuccillo a Notice of Allowance in August 2005. He managed to wait almost three years before filing an SOU. A federal court in New York subsequently found this SOU was fraudulent, holding that "Tuccillo was not in fact operating a bona fide ... restaurant under the JAPONAIS mark" for the time periods he had claimed.