A few years ago we were approached by an online nutraceutical company to assist them in the enforcement of their trademarked product lines. The company came to us after a prolonged period of watching their monthly sales decline and finally suspecting that one of their competitors was somehow stealing some of their customers. More specifically, over a period of six months they watched their annual revenue pace for their main product line fall from $1 million per year to just over $500,000.
Unfortunately for our customer by the time they came to us it was too late. Although we quickly discovered the infringing activity that was causing the revenue loss and were able to stop it almost immediately the damage was done. Our customer could not sustain the revenue loss which had already occurred and soon was forced to file for bankruptcy.
In retrospect, the worst part of this story is that it was all preventable. As we later discovered, months before their revenue decline started the infringing trademark owner had filed an intent-to-use trademark application with the U.S. Patent & Trademark Office. If only our customer had had in place a trademark monitoring plan for its brands it would have alerted them of the then prospective infringement. If only they could have acted then to stop the infringement of their trademark before it impacted their business. If only.
Their story illustrates the reason Trademark Monitoring is a critical step in your brand protection strategy. Below we explore this and other reasons why every business should have a monitoring plan in place.
1. Loss of Trademark Rights: Failure to monitor and police your trademarks can lead to the loss of your trademark rights. For instance, if third parties begin use of the same or similar trademarks in commerce in connection with goods and/or services similar to your’s and you do little or nothing to police your trademark, the trademark is likely to lose some or all of its value as a source identifier in the marketplace. As a result, the trademark will become weaker and, in some cases, you may lose your rights in the same entirely.
To avoid the loss of your trademark rights, you must police your trademark(s) monitoring for infringement of the same and, if discovered, enforce your trademark rights through various legal means such as sending cease and desist letters, proceeding with opposition and cancellation proceedings with the Trademark Trial and Appeal Board, or other measures that may be appropriate under the circumstances.
2. Loss of the Ability to Enforce Against a Particular Infringer: The failure to act to stop infringement of your brand when you knew, or should have known, that the same was occurring may prevent you from enforcing your trademark against another where their infringement has not been promptly addressed. This is better known as the equitable doctrine of laches.
The doctrine of laches places an affirmative duty upon you, the trademark holder, to enforce your trademark(s) against known infringement within a reasonable amount of time. The doctrine extends not only to infringement that the trademark holder actually knew about but also to infringement you reasonably should have known about given the circumstances involved in the use of your brand. In short, if you were monitoring your trademark would you have known about the same? If the answer is in the affirmative, the law places upon you a duty to promptly enforce your trademark.
Why? The doctrine of laches recognizes that in the interests of “fairness” even infringers of trademarks have the right to be notified that their use is in violation of your rights within a reasonable period of time. If an infringer relies upon your lack of enforcement and, within that period, builds its own competing brand expending its resources to do so, laches may preclude you from enforcement against this infringer. In short, the doctrine recognizes that it is unfair for the trademark holder to allow the infringer to rely upon non-enforcement of a trademark to the extent it creates a belief in the infringer’s mind that their use is permissible such that they invest in building their own brand.
When Anheuser-Busch failed to protest to DuBois Brewing Company’s use of “Budweiser” for an extended period of time a court concluded that DuBois could not be prevented from using the term in connection with their beer. Anheuser-Busch, Inc. v. Du Bois Brewing Co., 175 F.2d 370 (3rd Cir 1949). Although DuBois is no longer in business, this demonstrates that the doctrine of laches is a real concern for all trademark holders, even mega brands such as Anheuser-Busch, and as such the value of monitoring and policing infringing uses cannot be understated.
3. Loss of Business: As the story at the beginning of this article illustrates, failure to monitor your trademark(s) can also lead to the loss of revenue and, in cases of significant infringement, the demise of your business. An effective monitoring strategy will identify infringing use early on before it can impact your business. Moreover, the sooner infringement is discovered the easier it is to resolve. The more money an infringer has invested in a business, name, or website, even if it is infringing on your rights, the more likely they are to put up a fight against changing their infringing trademark leading to continued revenue loss for your business while the trademark battle rages on. Monitoring helps you spot the infringement early and to stop it before your business experiences revenue loss by an entrenched infringer.
Trademark monitoring services are a critical step in your brand protection strategy. As discussed above, proper monitoring and enforcement are required to maintain your rights in your brand. Moreover, it eliminates the ability of infringers to claim that their infringing activity is allowed under the doctrine of laches. Finally, and perhaps most importantly, proper monitoring will ensure that infringing activity does not siphon off your customers leading, in the most dramatic cases, to the failure of your business.
So should you employ a Trademark Monitoring service? In reality, can you afford not to?
As always, if you have any questions regarding this or any related topics Contact Us at TTC Business Solutions.