While the so-called “hard IP” gets a lot of publicity (think of all the articles you have read recently on patent trolls or patent reform), the softer side of intellectual property law is seeing a lot of activity as well. From the saga of the cancellation of the Washington Redskins trademark to a Supreme Court case that concerned the transmission of copyrighted materials over Aereo antennas, trademark and copyright laws have been in the spotlight quite a bit.
I recently sat down with Michael Allan, partner at Steptoe & Johnson LLP, to discuss trends in trademark law. The first topic Allan brought up was the increasing prominence of the International Trade Commission (ITC) as a venue for determining trademark and trade secret cases. “People think of the ITC primarily as a patent forum, but the commission has broad powers,” Allan explained. “The commission is tasked with the ability to grant exclusion orders to prevent unfair acts in the areas of patents, trade dress, trade secret and trademark infringement. Many don’t think of the ITC as an enforcement tool outside of the patent context.”
Cases won’t always be a good fit for the ITC, Allan says, but there can be several advantages to using the ITC. “When you are dealing with a large scale, sophisticated infringement operation, the ITC is one-stop shopping,” he explains. One advantage is the ability to name multple respondents in the case, that may be based all over the world without the same jurisdictional issues that would arise in federal court.
Putting a group of infringers into one case is attractive and cost-effective, providing discovery advantages. Allan used the example of counterfeiting cases. The ITC can, for example, take factory tours in China, which cannot be done by a district court and does not require a company going through The Hague. “The speed and predictable timing of ITC cases is another reason the forum should be considered for trademark, copyright and trade secret cases,” says Allan.
Because many lawyers don’t practice before the ITC, they don’t know much about it. Even for seasoned IP litigators, it’s not on the radar. But, Allan says, companies should put it into their arsenal of potential enforcement tools and evaluate whether the ITC makes sense for them. However, Allan cautions, the procedural rules there are a bit different from a district and that those without ITC experience should be wary.
Another major trend that Allan sees is an increase in the boldness of infringers. This manifests in several ways. Many companies are trying to operate in a gray area, selling products, such as perfumes or apparel, “inspired by” a particular brand, under the auspices of nominative fair use. These companies, according to Allan, get as close to the line as they can without crossing it. “Some companies adopt logos, fonts, colors and trade elements to get people to buy imitation products, and they cross the line,” he says, noting that he has seen an uptick in this practice recently, as infringers have gotten more creative in trading on the goodwill of brand names under the guise of some sort of legality.
In the same vein, Allan notes that sophisticated infringement outfits go through the trouble of trying to register famous trademarks at the U.S. Patent and Trademark Office (USPTO) that are close to – but not identical to – other famous brands. He uses the example of a company taking the Nike swoosh, flipping it around and putting an extra tail on it to see if the USPTO would register it. “That way, if their products are seized by customs, they can wave their registrations in front of customs to get the goods through,” Allan explains. Likewise, if stores are concerned about selling the product, the company can wave the same paper in front of them, and even use it as a shield if approached by the brand owner.
“One thing I have seen recently is very sophisticated groups are taking a portion of a famous trademark and manipulating it and seeking to register that,” he adds. This adds an air of legitimacy to what infringers are doing, and forces brand owners to take action.
A final area of interest to Allan is an issue concerning crowdfunding websites like Kickstarter and Indegogo. “If you put your information on a crowdfunding site, you should have a patent,” he recommends. The best practice is for small businesses to start thinking about their IP before they put any information out about their project, or they risk losing IP protection.