by Mark Malek

As our readers know, we here at TacticalIP like to point out the times in which intellectual property has been used in an inappropriate matter, i.e., when intellectual property owners get a little too overzealous in enforcing their rights.  We have previously posted a series of articles on IP Bullies (see our articles here, here, here and here).  Of course, there is the infamous case of The North Face v. The South Butt.  This could be one of my all time favorite IP Bully cases gone wrong.  The case has settled now, but what a disaster it turned out to be, in my opinion, for The North Face, and what a success it turned out to be for The South Butt.  Some more information on this case is available here.

Commerce Secretary Gary Locke

According to an article that I recently read, part of the Trademark Technical and Conforming Amendment Act of 2010, passed earlier this year, directs the Secretary of Commerce to study and report “the extent to which small businesses may be harmed by litigation tactics attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner.”  So it turns out that a bunch of Congressman have received some complaints from their constituents that big bad businesses are bullying them into not using their trademarks, and now Congress wants to conduct a study of the effect of such tactics.  Please join me in asking the following – are you kidding me???

I personally do not think that in these economic times, Congress should be directing funds to such a study.  I know that those who disagree with me argue that this is precisely the time to spend money on such a study.  They are arguing that if bullying litigation tactics are being used to shut down small businesses, it is damaging an already weak economy.  Good argument, and one that I do not necessarily disagree with.

It is my opinion, however, that the study should be refocused.  I believe that a study should be conducted as to the rise in infringing activity – especially with respect to trademarks.  Is the infringing activity linked to anything?  I suspect (and this is from my own personal experience in my practice and observing the cases that are coming through the door now) that such a study will indicate that there are several people out there that are trying to make a quick buck on the back of someone else’s intellectual property.  Here at Zies Widerman & Malek we have seen a significant rise over the past year in intellectual property owners having their intellectual property improperly used by others in ways that can only be described as blatant infringement.  Sometimes I struggle to believe that these cases do not immediately end after a cease and desist letter is sent out.  I believe that the desire to fight, however, may come from some attorneys out there that may also be struggling and looking to also make a quick buck.  Inevitably, most of these cases have settled, but not after the potential infringer paid an attorney several thousands of dollars.

Back to the study that Congress has requested.  There may be some validity to it, but I believe that the request of the Secretary of Commerce is overly broad, and if the study is conducted in the manner that Congress has set out, those carrying out the study will likely be spinning their wheels.  The study will likely show that, in cases where there truly is some IP Bullying going on, the situation is devastating to the small business.  I’m sure that I am not setting forth a theory that is ground breaking.  For the study to be meaningful, however, I believe it needs to include an entire section dedicated to a study of the economic times and the rise in intellectual property litigation.