Nearly 150 IP practitioners attended MIP’s Global Trademark Forum at Convene in NYC, where international filing strategies and brand enforcement considerations were discussed
Many in-house practitioners were in attendance, and shared practical tips on portfolio management and what they’re looking for in outside counsel .
International filing strategies
Francesca Silverman, senior IP counsel at Mastercard, says that the decision to register can be a strategic business move that doesn’t necessarily depend on marks’ registrability. “Our marks are usually pretty descriptive,” she explains, “so they can be tough to register. But we’ll apply if we want something on the record to indicate to our competitors: stay away”.
With limited budgets, it’s important to register in alignment with business priorities, and not register arbitrarily where it’s not necessary. “The Caribbean is my personal pet peeve because it’s so distributed,” shares Marcella Ballard, partner at Venable, “and the Middle East is so expensive!”
Julianna Orgel-Eaton, senior corporate counsel at Ziff Davis, adds: “If a business unit gives me a list of 15 countries, I need to understand how they’re planning to use the mark there, and each country’s policies”. She recommends targeting first-to-file countries initially, even if the business doesn’t function there. “We’ve had issues in Saudi Arabia and Nigeria,” she says, “because there was infringement but we didn’t have use, so we couldn’t get a registration”.
Michael Crane, senior counsel at Choice Hotels, explains the importance of budgets in filing strategies: “When I was at Capital One,” he says, “they were only in three countries, and they had more money than anyone, so we would register wherever we wanted”. Now, managing 13 hotel brands with Choice in 44 countries and growing, Crane has to be more strategic, particularly considering that “once you get a mark, no one wants to cancel it and you’re tied into it forever,” he laughs.
Crane’s advice is to be skeptical of the sales and marketing teams’ big dreams: “They’ve been trying to convince me for years that we’ll open a hotel in Bangladesh tomorrow”. Another tip he shares is to license use to someone else in a jurisdiction that the business can’t afford to register in. “Use your mark there before the business is ready to go there,” Crane says. “Sell t-shirts in that country; get creative. And keep your evidence of use!” Jenny Greisman, IP attorney at IBM, notes that saving specimens of use is important “in the US especially, because it’s one of the few countries that requires proof of use from renewals”.
David Cohen, chief trademark counsel at Honeywell, agrees that “exploiting the system is important in maintaining a global practice”. Like the t-shirt strategy, he says “we run ads in places where we need to establish use”. Unlike startups looking to expand that try to register everywhere, Cohen says at Honeywell, “we file narrowly because we’re looking to use, not enforce”. This conservative strategy results in filing and encountering fewer oppositions and cancellations, and makes coexistence agreements easier to negotiate. He warns, however: “Be careful to make sure you can keep your promises long term, because coexistence agreements go on forever”.
Beyond trademark registrations, other types of IP are important to consider, although their usefulness depends on jurisdiction. “Hopefully there will be broader trade dress protection going forward,” says Danny Awdeh, partner at Finnegan, referring to the US Supreme Court’s 2017 Star Athletica decision. “The evidentiary burden of trade dress can be quite high,” he explains. “Design patents have a narrower scope of coverage, but can be good in the interim, and of course copyright can’t be overlooked”.
Another often-overlooked aspect of brand protection is ensuring up-todate information such as the name and address of the mark owner. “You can’t sue in the name of a dissolved entity,” explains Julianna Orgel- Eaton, senior corporate counsel at Ziff Davis, “so make sure your trademarks are updated if you move offices, merge, anything like that”.
Ziff Davis acquires five to 10 companies per year on average, so Orgel- Eaton has it on good authority that “inherited trademark portfolios can be a nightmare”. Mary Leheny, associate general counsel at Verizon Media, adds: “There’s a special place in hell for trademark attorneys who don’t do those recordals in good time”.
Perhaps even more than managing acquisitions, rebranding requires considerable efforts on the trademark front. Mastercard revealed in January that its logo will drop the name, and go by the interlocking circles alone. “It was a big deal from a budget perspective,” says Silverman, “but very positive from an enforcement perspective, because our rights are expanded; previously we were limited to the word mark, and now we have interlocking circles!”
Silverman explains the impetus for the change was the industry-wide trend of brands becoming less visible. “Merchants, banks, and consumers don’t want huge brands anymore,” she says. “Mastercard used to take up half the front of the card, now it’s tucked away on the back”. To compensate for this loss of visibility, Silverman has pursued nontraditional marks.
“Sounds are a great way to do this,” she says. “We have a short transaction tone, and a longer jingle for ads”. She says protecting these sound marks has been an adventure so far because there aren’t effective clearance tools yet, and the concept is relatively new, so many jurisdictions have unique and untested policies. Silverman explains: “It’s been case by case. We got the sounds in the US and EU, and South Africa said we could protect the longer sound but not the shorter sound”.
Obtaining registrations is only half the battle. “If you really want to build the intangible value,” according to Naresh Kilaru, partner at Finnegan, “you need a strong enforcement programme”. Kilaru says that in the US, brands used to be able to get away with not enforcing their marks if an infringer wasn’t a competitor, or commercially relevant. However, “the burden has got higher since the Federal Circuit’s 2015 Juice Generation decision,” he explains.
Since that decision, he says, “enforcement is not an option. You have to monitor your marks closely, because each notice could start the clock, and constitute actual notice for the purposes of laches”. Monitoring and enforcing marks can be expensive, but Kilaru is adamant: “You can’t put a value on the failure to enforce. The business will ask you about the ROI, and you have to tell them that, unless you’ve done the housekeeping over the years you won’t be able to enforce. If the other side can put forward evidence of credible third-party use, it eviscerates your brand value”.
Sometimes strong enforcement can work against brand value if they come across as trademark bullies. Joseph Sherinsky, senior counsel at Mitsubishi, is sensitive to this issue. He is conservative with trademark enforcement, and only gets involved if consumers are truly likely to be confused. “We don’t like to use the power of our brands to prevent businesses from competing with us,” Sherinsky says. “We’ll beat them with our superior products, not because we prevented them from entering the market with our mark”.
Jennifer Wilen, vice president of legal at Bombas has a similar approach: “We’re a very mission driven company,” she explains, “so we try to support other companies that have similar missions, and not be a trademark bully”. In the case of unauthorised resellers, she says “we send a really nice cease and desist letter, and ask people to donate our socks instead of selling them”.
At JetBlue, Brian Friedman, director of litigation, says that the enforcement decision comes down to the products in question. For commercial airlines, they’ll very strongly oppose registrations even in areas the company is not planning to expand. “Ancillary products are murkier,” Friedman says, but it depends on the message. For example: “If our brand is associated with anything disreputable or unsafe on social media, we’d seek to immediately take it down”. Managing IP covered the social media best practices discussed here.
Crane, at Choice Hotels, says bluffing potential infringers about your willingness to oppose them is a great way to save costs on oppositions and litigation. “Even if we’re not going to oppose,” he says, “we’ll call them and tell them we’re going to oppose unless they take out certain services from the registration application”.
Finding the right people to approach; to threaten litigation, send C&D letters, or otherwise communicate; can be a challenge. “GDPR put the kibosh on being able to locate the right person,” says Ziff Davis’ Orgel- Eaton. In her experience, approaching the registrar directly has been more successful. “If you cite their policy in your email, they’ll take down the content at least, though they won’t assist in transferring the domain name”. Private investigators can also be effective in many jurisdictions, she notes.
The choice to send a demand letter versus going straight for litigation depends on reasonableness, according to Anthony Palumbo, associate general counsel at Chobani. “When we were dealing with aspiring dirt bike trapeze artists in Florida, we just took action because it seemed they would not be reasonable,” he explains.
Threatening litigation and beginning proceedings does not mean that the company will suffer the full cost of litigation. The vast majority of cases settle, and it can even be lucrative. Dan Block, director at Sterne Kessler, explains: “You can get significant revenue from settlements in counterfeiting cases because they have no real defence.” Cost-neutral litigation ideally involves over 50 defendants – “that’s when the money made makes up for the cost,” according to Block.
He recommends PayPal as the most cooperative payment provider, because they freeze counterfeiters’ accounts and transfer their assets. Wish.com is also helpful,” he says, and expects Alipay to improve soon because “Alibaba has been on a PR campaign to be more open to things like this”. Amazon has been a “notable exception,” Block says, and remain “difficult to deal with”.
Monica Talley, director at Sterne Kessler, summarises the considerations: “Is it a health and safety issue? Are we losing sales? Does it harm brand strength? Is there reputational harm? Is there a political issue? How long have the infringers been out there? How invested is the other company in the brand? What is the likelihood of success on the merits? Would they respond well to a demand letter? Can we call them directly, or through the web-host or registrar? Are domain names that we want involved? With counterfeit activity, can US or foreign customs officials get involved? If it’s coming from overseas, how can we get on-the-ground intelligence? If they have a US registration, would an opposition or cancellation petition at the USPTO handle it? If we are going to litigate, at which level?”