Armored assets

Trademarks need global protection because of their overall value

Trademarks are just not a form of legal protection. They represent a company's brand and are therefore extremely valuable. For instance, worldwide investment in branding totaled about a half a trillion dollars in 2011, according to the World Intellectual Property Organization.

Given all that trademarks involve, many companies—including Chrysler—do everything they can to leverage trademarks. That means that the general counsel's office plays a key role company-wide when it comes to trademark usage.

Amanda Conti-Duhaime, senior staff attorney at Chrysler Group LLC, has a great deal of experience in trademark law. “Every department in the company leverages the trademark in some way,” she says. Her role also goes beyond sending out cease-and-desist letters or filing trademark applications. “I spend a lot of my time educating everyone that it's all about the brand,” Conti-Duhaime explains.

Another major concern for in-house trademark attorneys is that they need to get involved in corporate discussions early if the company is planning to expand. This is especially important for overseas markets, as it takes time to acquire trademarks in other countries. This practice is becoming increasingly relevant because many U.S.-based multinationals are likely to expand in emerging markets over the next decade, according to Miriam Claire Beezy of BakerHostetler, former chief trademark counsel of The Walt Disney Company.

Examples of countries where expansion is likely include China and India. In the case of China, trademark situations appear to be improving, but some attorneys from the United States would like to see better trademark protection. For instance, more could be done there to improve the outcome of brand recognition proceedings.

In addition, companies face the problem of counterfeiters from other nations, especially those who sell counterfeit products online, and what Beezy calls “hijackers,” who squat on trademarks and then cunningly ask for money from legitimate companies. “I find that the amounts are increasing that people are asking for,” Beezy says.

Globally, Mei-lan Stark, senior vice president, intellectual property for Fox Entertainment Group, and president of the International Trademark Association (INTA), would like to see “greater harmonization” in trademark law around the world, which she said would make it better for everyone.

When trying to bring up trademark issues to a board or C-Suite, general counsel may bring these concerns up while discussing risk, or they may want to broach the subject in a discussion about compliance or as an issue related to assets.

But the golden rule is to file trademarks early. “It often isn't done early enough,” Beezy says. “It's less expensive to undertake it in the beginning.”

As far as current challenges, social media has raised a lot of issues related to trademarks. “People are very passionate about your brand,” Conti-Duhaime explains. Many fans will use the brand's name and marks on social media sites. Be forewarned — attorneys have to expect that a cease-and-desist letter sent out to those improperly using a trademark may end up getting posted on public websites for everyone to see.

“They will likely be posted and may even go viral,” Tiffany Trunko, vice president and assistant general counsel at Pfizer Inc., says. “These battles increasingly play out in the public eye.”

These posts can be read by shareholders, customers, regulators and the general public.

Conti-Duhaime cautions general counsel not to come on too strong when contacting fans of the brand. Stark agrees. “When looking at fan uses of intellectual property it's a delicate balance,” Stark advises. A company does not want to alienate an individual who is a fan of the product, yet companies sometimes need to ask fans to refrain from doing certain things. It is important, too, for companies to avoid being labeled a “trademark bully.”

Many companies opt to post online a policy on how they expect trademarks to be used by the public. Some companies have a dedicated inbox for those seeking permission to use the company's trademarks.

Another sector where there are trademark issues is the area of new domain names. In 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) approved a plan to expand the number of new Generic Top Level Domains. These could include such examples as .money or .beer.

Monitoring these domain names is important. “This is a big problem, especially for smaller companies,” says Barton Beebe, who teaches IP law at New York University School of Law. He points out that this is a concern not only in English, but in such languages as Arabic and Russian as well.

To help, ICANN set up the Trademark Clearinghouse (TMCH) Though the TMCH has received praise, the INTA has cautioned that “replacing domain name watch services or relying solely on the Trademark Claims Service is not advisable, especially in view of the finite, limited duration of the Service (90 days).”

“The Claims Service should at a minimum educate a prospective registrant and deter potential ‘unintentional infringers,” the INTA adds. “Furthermore, despite speculation that this warning may have little to no deterrent impact on cybersquatting, it may strengthen a trademark owner's case in enforcement proceedings.”

Another recent trend relates to the Uniform Rapid Suspension (URS) System. URS provides a faster process than the Uniform Domain Name Dispute Resolution Policy (UDRP), Beebe said. He points out that it applies only to fully registered trademarks, not common law marks, and has a less-expensive filing fee than with UDRP. He recommends that it be reserved for “slam dunk” issues.

Looking ahead, there could be more concern when it comes to non-traditional trademarks, such as those involving colors, sound, product configurations and 3D printing, Beezy says. Also, there may also be more issues on trademarks when it comes to operating in the cloud, says Trunko.

Trademark attorneys also recognize that some other areas of IP law, such as copyright or patents, traditionally get more attention from the court system or Congress, or even from their own companies.

Overall, though, attorneys generally praise the trademark laws in place in the United States.

“The law is fairly well developed,” Trunko said about U.S. trademark law. “Tests are fairly well developed.” There have been updates made to the Lanham Act, she adds, such as cyber-squatting protection.

Upcoming Supreme Court cases on trademark law include B&B Hardware, Inc. v. Hargis Industries, Inc. It is possible the Supreme Court could rule on the case in such a way that would make the Trademark Trial and Appeal Board more influential in court proceedings. Another upcoming trademark case at the Supreme Court is Hana Financial, Inc. v. Hana Bank, which focuses on trademark tacking as it relates to older and newer trademarks.

Recently, there has been a split among the different federal appeals courts when it comes to rulings on getting preliminary injunctions. There is also sometimes confusion about standards related to functionality and product configuration.

When it comes to the trademark side of the United States Patent and Trademark Office (PTO), most lawyers were generally pleased, though some complained of delays in some types of proceedings.

“The trademark side of the PTO is quite efficient and reasonably impressive,” Beebe says.

Contributing Author

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Ed Silverstein

Ed Silverstein is a veteran writer and editor for magazines, websites and newspapers. A graduate of Harvard's Kennedy School of Government, he has won several...

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