Intellectual Property

3 Lessons On Data From Trademark Cases

Big data continues to deliver insights that IP lawyers can use in their practices.

By  
on

Big data continues to deliver insights that IP lawyers can use in their practices. Thanks to information provided by the legal analytics firm Lex Machina I have been able to review statistics on trademark cases filed nationwide from 2009 to 2017. While everyone who peruses the report could arrive at different takeaways, to me the report was of primary interest because it allows me to counsel my clients better with respect to three questions that arise in the context of trademark disputes. First, where are judges most familiar with trademark matters? Second, how do trademark cases typically get resolved? Third, and finally, who wins contested issues in trademark cases more frequently, plaintiffs or defendants? We will address each question in turn.

As an initial matter, it is interesting to note that there has been a steady, albeit slight, decline in trademark cases filed since 2009. Whether that is because more disputes are being heard in extra-judicial fora such as UDRP proceedings or even Amazon’s black box treatment of trademark complaints, or because more brand owners are cost conscious about exercising their policing obligation is an open question. At the same time, certain industries and brands continue to regularly file cases, concentrating those filings in a few district courts.

Which brings us to the answer to our first question. For IP practitioners, it will not be a surprise to learn that the district courts located in or near the major brand owner-heavy cities of Los Angeles, New York, and Miami are the three most popular jurisdictions for trademark disputes. While the top two, Los Angeles and New York, are a given due to the heavy presence of fashion and entertainment businesses in those cities, Miami appears as a bit more of an up-and-comer — perhaps reflective of the international nature of business activity in that city. In fact, Lex Machina notes that Miami (along with Chicago) and its environs appear to have seen more cases filed recently, even as filings in the Los Angeles-area courts have declined “each quarter since the beginning of 2015, roughly tracking the overall decline in filings of all trademark cases.”

Knowing which jurisdictions have trademark-savvy judges can make a difference when counseling clients on such heady questions such as where to file, or how experienced the judge they draw is with trademark matters. An L.A.-based judge who sees on average 20+ trademark matters a year will likely have more of a track record to study than their counterpart in a less-traveled trademark jurisdiction. But that less experienced judge could be more pliable on the issues, or at least more open to taking a look at the case without preconceived notions as to how the schedule should look, or how much weight should be afforded the opinions of survey experts, for example. Either way, knowing the experience-level and docket situation of the courts your client has trademark matters in can be important in terms of setting case strategy and tactics.

Turning to our second question, it is important to note that while patent cases overwhelmingly settle, there is a relatively smaller percentage of trademark cases resolved through settlement. The data shows that while approximately 60% of trademark cases settle, a good 25%+ or so are also resolved on default judgment. The latter figure is most likely a consequence of the significant counterfeiting activity that legitimate brand owners can face from fly-by-night outfits or unscrupulous individuals, who fold up and disappear when confronted with a lawsuit complaining about their behavior. In any event, the fact that at least 1 in 4 trademark cases ends up in a default judgment speaks volumes about the resource imbalance many brand owners have over less-commercially established targets. At the same time, it can be helpful to explain to clients that the likelihood of settling a trademark case remains high, even when the likelihood of securing a default judgment is lower. If that information makes both sides of a case more reasonable, all the better.

With respect to our third question, it is important to realize that once you subtract out defaults and settlements, you start to have a much smaller workset with respect to trademark cases that actually progress to a decision on the merits. In fact, 90% of all Lanham Act violation findings occur on default or consent, which may be eye-opening to litigants in a hotly-contested competitor battle where the arguments on the merits are otherwise balanced. While those who look at the data can find reason to encourage brand owners, even aggressively litigious ones, to press their claims at every opportunity, the data does also counsel caution. Trademark cases that don’t settle or end in default actually can be a bit of a toss up on the merits, with over 50% of defense findings coming on summary judgment. In short, if your case is not a slam dunk, be prepared to defeat a motion for summary judgment if you hope to successfully prosecute your trademark claim.

Ultimately, it is worthwhile to occasionally review litigation statistics in order to develop a general sense of trends in a particular area of law. While the “big picture”-type statistics such as number of cases filed grab the headlines, there is often valuable information available for those willing to drill down into the data a bit more. At bottom, trademark litigation remains an important component of their practice for many IP lawyers. When it comes to analyzing data of this type, we can all ask the questions we most want answered, and focus on getting the answers we need. Empty numbers are valueless, but considered statistics can be super valuable.

Sponsored

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

Sponsored

Topics

, , ,