Overhyped “Trademark Bully” Study Delivers Predictable Results

UPDATE: More Thoughts on the “Trademark Bully” Report: The Department of Commerce did a Good Job with a Bad Assignment

Posted by:Julia Hustonon 1:20PM, May 17, 2011


The long-awaited study of so-called trademark bullies was recently released by the Department of Commerce. As you may recall from our prior blog post, the study was the result of legislation filed by Senator Leahy of Vermont and signed into law by President Obama on March 17, 2010 (Pub. L. 111-146, Sec. 4). The legislation gave the Secretary of Commerce one year to “study and report to [Congress] the extent to which small businesses may be harmed by litigation tactics [by corporations] [the purpose of which is] attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner.” (Subsequent to enactment, the words “of corporations” were stricken and replaced by “the purpose of which is” by Pub.L. 111-295, Sec. 6(h).)

Senator Leahy apparently requested the study because he was frustrated that Vermonster, a local brewery of beers and ales in his home state, was being targeted by Hansen Beverage Company, the producer of Monster Energy Drink. The legislation was quickly passed by the House and Senate, before anyone in the intellectual property community had a chance to react or submit comments.

This unfortunate legislation is an example of what lawyers call “bad facts make bad law.” Many people questioned the wisdom of commissioning an expensive study of trademark issues during a severe national budget crisis, especially given the other priorities facing the nation. Others felt that so-called trademark bullying did not deserve any more attention than patent bullying or any other kind of litigation-related bullying.

The Department of Commerce dutifully undertook the required study, and publicly released the results on April 27, 2011. Ultimately the study did not tell us anything that we did not already know. The study revealed that some people think that over-aggressive trademark enforcement is a problem, and some do not. The views expressed to the Department of Commerce were largely drawn from the respondents’ own anecdotal experiences rather than any consensus among similarly situated constituents. The Department of Commerce ultimately could not answer the question that Congress had posed, and acknowledged that, “Given the limited data available, it is extremely difficult to determine the extent to which trademark owners may be purposefully overreaching when enforcing their rights, and doing so with sufficient regularity for it to qualify as a significant problem.”

The Department of Commerce did not recommend any radical changes in trademark law or practice, but instead suggested exploring ways to educate potential trademark litigants and make pro bono counsel available to parties who cannot afford attorneys. While these ideas are certainly uncontroversial, they are also not likely to make a significant difference in the way that trademarks are enforced and defended in the United States.