In-House IP Attorneys Not Surprised by Reported Growth in Brand Protection Spend

More than a third of companies have increased trademark policing budgets since last year, according to a recent report from IP management and analytics software company Lecorpio.

While intellectual property assets are undoubtedly valuable for many companies, it's often the case that other concerns rank as top priorities for in-house lawyers, such as reducing legal spend and compliance and ethics management. So it might be unexpected that legal departments are adding to trademark policing budgets, but for two in-house IP counsel, the finding that additional resources are being devoted to brand protection is not at all surprising.

Lecorpio's second annual "Trademark Management Study," released May 16, asked the company's corporate counsel clients about changes in their trademark portfolios and in-house counsel teams. Responses to one question reveal that 36 percent of respondents increased their trademark policing budgets in the past year. This is a marked increase from the 18 percent who reported this budget uptick in last year's results.

At least one factor leading to increased resources around brand protection, the in-house attorneys said, is the ongoing roll-out of generic top-level domains (gTLDs), overseen by the Internet Corp. for Assigned Names and Numbers (ICANN). In May of last year, the ICANN announced more than 1,000 new gTLDs—the last segment of a domain name, such as ".com" or ".org"—leading to some concern that this would expand the universe for cybersquatters.

"Every day, they are adding new domains into the system and there are a number of variations that can be used," said J. Scott Evans, director of trademarks at Adobe Systems Inc. Although he said there has not been a huge increase in infringers, he explained that there has been steady growth and more activity each quarter, as "every new domain that opens up is just another playing field for bad behaviors."

This, in turn, increases the need for monitoring and enforcement to protect the brand, according to Evans. And whether the decision is simply to watch for bad actors, litigate or opt for a domain name dispute, "all of that is money that has to be spent," Evans said.

At Time Warner Inc., the influx of top-level domains has required additional efforts and resources on two fronts, said Bradley Silver, chief intellectual property counsel at the company. "It's important for any brand protection program to have a good grasp on where marks are being used, who is using them and how to drill down on those that require more attention," he said. "In getting there, we definitely had to spend a lot more time and are still devoting additional time and resources in monitoring that activity."

Along with monitoring for infringement, enforcement can similarly require more time and spend, Silver noted. There are a number of protection options offered by ICANN, he said, such as the ability to take advantage of so-called "sunrise" registrations, which give trademark holders priority access to certain domain names. "But in order to participate in them, we've had to incur additional costs or devote additional resources," he noted.

Beyond purely preventing infringement, brand protection is also a matter of security, Silver said, because cybersquatters may scoop up domains for the sole purpose of collecting information from users or spreading malware. "We have all the usual reasons why it's important for brand owners to protect [trademarks]," he said. "But for us, we're not just thinking about this from the perspective of being a brand owner, we're not thinking about this in a vacuum, we think about it in the context of partnering with information security colleagues."

As for whether it's difficult to get company executives on board with increased costs, Silver noted that it's generally not an easy sell when asking for more resources, but "where those costs can be justified, there's less resistance." And with more awareness of the link between infringement and cybersecurity threats, Silver said "there's a higher degree of cognizance about the importance of addressing [brand protection]."

Contact Jennifer Williams-Alvarez at jwilliams@alm.com

Contributing Author

Jennifer Williams-Alvarez

Jennifer Williams-Alvarez is a staff reporter for ALM Media and Inside Counsel. She can be contacted at jwilliams@alm.com.

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