Intellectual Property

The Decade In Trademark Litigation

There is still a lot we can learn from looking at the decade past at a macro level.

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Considering that we are starting a new decade while continuing to face such questions as “Are We Running Out of Trademarks?,” I thought it would be a good idea to first look at what existing trademark owners did with the trademarks they had last decade. If only because that is easier to quantify for a practitioner than existential challenges to the “assumption that there exists an inexhaustible supply of unclaimed trademarks that are at least as competitively effective as those already claimed.” The latter issue is in the capable hands of Professors Beebe (who I was lucky enough to take Trademarks with in law school) and Fromer, who along with their academic colleagues have contributed mightily to our understanding of where trademark law can and may be going in the near future. But my aims for this column are more prosaic, because I think there is still a lot we can learn from looking at the decade past at a macro level, especially in as fragmented a field as trademark litigation.

I characterize trademark litigation as “fragmented,” at least in part based on my own experiences counseling clients on different aspects of the field. At one end of the spectrum stands the anticounterfeiting work that I discussed in last week’s column, where the trademarks at issue are undoubtedly strong, and the questions of infringement and damages are readily determined. At the other end are the competitor cases, particularly those involving overlapping or otherwise contested marks, where there may be serious questions about infringement and damages. Along the way, trademark litigation can and will often involve questions of cybersquatting, or international sales, or even cases of clear-cut bullying by brand owners.

While each case presents its own challenges, both in terms of making proofs while sticking to a realistic litigation budget as well as dealing with the emotions around brand names and their reach, it is also true that trademark cases share a lot in common with other types of IP disputes. As with patent cases, for just one example, trademark litigators must be familiar with the PTO’s machinations, as well as the preferences of the particular district court the case is being litigated in. Throw in the need to work with damages and survey experts, while managing what can be very involved discovery related to damages and liability, and the similarities between trademark and patent suits come into focus. The lack of a centralized appeals court is a major difference between patents (which has the Federal Circuit) and trademarks of course, both in terms of development of the law and a perhaps greater need for local expertise in how trademark cases will run in a particular circuit’s trial courts.

Perhaps most important for trademark litigators and their clients, however, is the need to remember that the overwhelming number of disputes — no matter how just the cause or heated the disagreement — will settle. Which prioritizes the need to consider creative approaches to resolving trademark claims, the best of which are grounded in a deep understanding of the client’s true business position and goals. Getting there is often not easy, but can be very rewarding when things come together for the client’s benefit. Keep that in mind as we consider what trademark litigation looked like in the past decade.

Once again, I was fortunate to have assistance from Rachel Bailey, a former trademark litigator and Legal Data Expert at Lex Machina, who was very helpful in providing me with data from Lex Machina’s robust databases about the past decade in trademark litigation. Lex Machina defines these types of cases as “A case with one or more claims under § 43 of the Lanham Act (15 U.S.C. § 1125), including trademark infringement, false designation of origin, false advertising, trademark dilution, cybersquatting, or unfair competition.” Over 44,000 filed cases met that criteria, which every year but one in the 2010s seeing over 4,000 trademark cases filed (with 2017 missing that threshold by less than 50 cases). Trademark litigation levels were relatively steady over the course of the decade, even as the past four years were on the lighter end in terms of filings. Considering the rise of mass counterfeiting cases discussed last week, as well as the continued challenges faced by brand owners in enforcing their marks, it seems likely that the number of cases will remain stable, even if we see more “informal” enforcement on online platforms like Amazon and others.

And where are these cases filed? A good 20% of the cases filed were in the entertainment/fashion/media hubs of Los Angeles and New York, followed by significant numbers of filings in Chicago, Miami, and San Francisco/Silicon Valley. Between them, the top five courts saw over a third of the filed trademark cases last decade. Which still left a significant number of cases filed across other courts nationwide, in sharp contrast to patent cases, where the top five courts usually see well over half of the filed cases. This data supports the idea that local expertise can be a difference maker in trademark cases, even if courts do not have specialized rules for those cases like you see in a lot of patent disputes.

Finally, the list of top trademark litigation filers last decade is interesting. Yes, it contains famous brand owners like Coach, Chanel, and Microsoft. But also high on the list is a super-litigious glass-bong maker known as Roor, which apparently needs to dance around the fact that marijuana-based trademarks remain illegal — at least as long as pot remains a Schedule 1 drug according to the DEA. Another entrant on the frequent filers list is Noco, which makes battery chargers and related gadgets. If anything, these less well-known filers suggest that certain companies know how to use litigation to build their brand value, while also proving that trademark litigation is not the sole province of household names. This is especially true on online platforms, where brands can rise or fall in popularity very quickly, with their rankings and page placement determined in large part by the host marketplace’s algorithms.

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Thanks to the data available from Lex Machina and others, it is easier than ever to quickly get a snapshot of historical litigation activity in trademarks and other branches of IP. While the decade to come promises new and more complex challenges for brand owners than the decade that past, any insight we can get into enforcement activity on a macro level can be an important piece of input when it comes to advising clients with current needs. Whether the big battles in trademark litigation in the ’20s will be fought online or in district court is up for grabs. But we know those fights are coming, while hoping that we can help our clients win those that come their way.

Please feel free to send comments or questions to me at [email protected] 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 [email protected] or follow him on Twitter: @gkroub.

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