Recently, Facebook was accused of being a ‘brand bully’ by a Nashville-based pet-themed social network called Facepets.com. Facepets is a company created by animal loving individuals in the local community for its users to share videos, pictures and information about their pets. On publication of the trademark ‘Facepets’ in August 2013 by the USPTO, Facebook contacted Facepets.com and asked it to abandon the trademark ‘Facepets’ claiming that it was bound to cause confusion with its own trademark and dilute its “famous” trademark. Facebook then went on to oppose the mark ‘Facepets’ at the Trademark Trial and Appeal Board (TTAB).
‘Trademark bullying’ or ‘brand bullying’ is a practice when a trademark owner resorts to litigation and uses its trademark rights to harass and intimidate another business beyond what the law might be reasonably interpreted to allow. In such cases, a trademark owner files a suit against another trademark user and tries to coerce it to stop using its trademark altogether. Suits such as these are also referred to as strike suits, commencing with a cease and desist notice and culminating with a suit if the user chooses to ignore it or responds to say that it will not cease from using the trademark. It is an aggressive strategy to enforce trademark rights beyond the scope of protection that law otherwise confers upon a trademark owner.
The trademark owner is typically a large entity which resorts to employing legal tactics with a view to preventing another from using a trademark which may not ordinarily pose a threat of eating into the trademark owner’s market share. The target of a brand bully is generally an individual or a small entity clearly lacking the means and monetary resources to contest the trademark owner. The most significant harm to the bullied entity is financial. The bullied entity may not have the means to challenge the bully and may necessarily have to rebrand, resulting in both rebranding costs and a loss in the value built in the brand. Potential direct and indirect costs may include amongst various others having to remove products from the market, injury to its reputation upon being sued and having to incur legal costs to defend a suit.
A brand bully however faces the risks of harming its own reputation/brand and also losing loyal consumers as a result of negative media publicity and campaigns by the ‘bullied’ business, or by public interest campaigns resorted to by consumers and advocacy groups. In domain name disputes, if the arbitrators determine that a trademark owner has filed a complaint in bad faith, it could be labeled a reverse domain name hijacker. An overzealous trademark owner may even be liable to damages resulting from the filing of a suit and then withdrawing it. The ‘bullied’ business may file a counter-claim or even obtain a declaration from a Court declaring the brand bully’s activities as unlawful and the suit to be invalid or unenforceable.
Diligent trademark policing necessarily requires proper consideration of the actual harm, as opposed to an emotional reaction when a brand owner sees an arguably fair, but unauthorized, use of its trademarks. Trademark owners must take into consideration risks that legitimate enforcement actions may be regarded as bullying. Prior to initiating any action for violation of rights in a trademark, a brand owner should carefully take into consideration the likely reaction it may cause. Brand bullying may be distinguished from an action taken by an owner of a well-known brand who seeks to prevent its dilution. In the case of the former, there may be no nexus whatsoever between the goods or services of the brand bully and the perceived violator.
A recent attempt by a logistics solutions company providing cargo management and delivery services to prevent the use of its registered trademark/trade name “GATI” by a non-profitable trust whose objectives were to support, facilitate and promote emerging artists in the field of dance, failed. Due weightage was given to the facts that the parties were engaged in and provided altogether different activities and there were no chances of any confusion or deception arising. Additionally the term “GATI” is a common Hindi and Sanskrit word meaning “movement” and has a direct reference to the business activity of dance. It was held by the Delhi High Court that no prejudice, harm or injury would be caused to the logistics/cargo service provider if an identical mark were used to operate a dance forum.
In another case decided on the same day by the same Court, the Defendant, a coaching institute which tutored engineering aspirants for entrance exams to premier educational institutes, was restrained from using the Plaintiff’s registered trademark “BRAHMOS” (used by the Plaintiff for supersonic missiles), for dissimilar services (viz. educational services) on account of it being well-known and qualified for protection albeit the dissimilarity.
In arriving at its decision the Court took into consideration that:
- The Defendant was not in a position to validly justify how it came to adopt BRAHMOS (
- The Defendant had used BRAHMOS with a dishonest and mala fide intention and motive viz. to cash in on the goodwill and reputation of the Plaintiffs
- BRAHMOS was coined, honestly adopted and used prior in point of time by the Plaintiff
- BRAHMOS was a dominant and prominent part of the corporate name and trading style of the Plaintiffs.
- Additionally the Plaintiff also imparted educational programs relating to the aerospace industry.
Upon being served with a cease and desist notice or even being sued, the bullied entity needs to consider whether its acts are infringing and whether it can stop using the mark with little or no harm to itself. In such cases, it is reasonable and less expensive to cease the infringing act. Where the target is of an opinion that its use is legitimate and ceasing the use will cause significant damage or loss, it may explain that to the purported bully and seek a resolution perhaps through a coexistence or consent agreement. Yet another option is agreeing to rebrand, but requesting for a reasonable period to do so and being reimbursed with rebranding costs.
Where an amicable solution cannot be arrived at and specifically in cases involving actual bullying, the bullied entity may seek a declaratory judgment from a court or carry out an extensive public relations campaign in the media. Facepets.com has done exactly this. It has filed a suit claiming clarification from the District Court of Tennessee at Nashville that it does not infringe or dilute Facebook’s trademarks and also that Facebook has engaged in the practice of trademark bullying.
The bullied entity may protect itself from trademark bullying by taking care when selecting brands by engaging the services of a competent trademark attorney who would conduct thorough trademark availability searches, and only pursuant to which approve the adoption of a suitable hassle-free brand and filing of a trademark application seeking its registration.