This is the third installment of a series of blog posts talking about the way some companies seek to enforce their trademark rights. You can read part 1 of the Trademark Battles here and part 2 of the Trademark Battles here.
Today’s lesson is another cautionary tale where a company regrets their decision to enter into the sometimes murky waters of trademark enforcement. It’s always better to tread lightly, particularly when you have exposure to the consuming public. Sometimes, you may find out that your decision to aggressively enforce your trademark leads you into trouble.
A few years ago, a company known as Specialized Bicycle Components, Inc. developed a reputation as a trademark bully. They had a problem with some counterfeit products being introduced into the market and knew that they needed to fight back to protect their trademarks. This is all well and good because it’s important to maintain the integrity of your trademarks in the market.
However, in this case, Specialized became very aggressive and, in the eyes of many people, overstepped their bounds by attacking many companies that didn’t really infringe the Specialized trademarks at all. A number of small companies either went out of business or had to spend a lot of money to change their name after being attacked by the lawyers for Specialized.
The response to the attacks by Specialized was brutal. The cycling community was outraged and let Specialized hear about it, loud and clear. Many customers, suppliers, and distributors went onto social media and complained about the overreaching approach taken by Specialized.
The President of Specialized soon realized that his company was taking a beating in the court of public opinion. He understood that the aggressive approach to trademark enforcement was hurting his company so he decided to take action and make a public apology. Here’s a link to the letter of apology sent out by the President of Specialized after the social media firestorm erupted. Yikes. Not only did the company have to apologize and backpedal, they took an ugly beating in the press. By admitting their mistake, Specialized hoped to regain some goodwill and the lost trust of their customer base.
So much like Apple, Disney, and other companies that aggressively enforce their trademark rights, Specialized learned that it’s easy to go overboard and the public at large may not like it.
Given the significant potential pitfalls associated with aggressive trademark enforcement, why do companies continue to do this? Why do companies take steps to attack the trademarks of companies when there is really little or no serious potential for confusion? Let me suggest a couple of reasons.
- Lawyers get involved. In many cases, a company will use outside legal counsel to “police” their trademarks or find potential infringers. The attorneys don’t make a lot of money until they find someone to go after. Accordingly, the attorneys may attack a relatively innocuous company over a relatively trivial trademark issue. The attorneys don’t really care about protecting the client’s trademark, they care about racking up the billable hours.
- Ego. Some people believe that their company and trademarks or logos are “special” and they want to ensure that everyone knows this. Even if their case is not strong, they want to throw their weight around and do so in order to prove their point.
- Because they can. Many small companies don’t have the financial resources to fight back. Larger companies know this and understand that faced with significant legal expenses, many small companies will simply give up because they can’t afford to fight. These companies count on the fact that they are bigger and have the resources to force smaller companies to give up their rights.
As shown by several of the situations discussed so far, throwing your weight around can have serious consequences and some companies regret picking a fight over trademark issues that aren’t critical to their business.
The moral of the story?
- Not all trademark battles are worth fighting.
- Be careful what you ask for. You just may get it.
Stay Tuned for Part 4.
Disclaimer – Yes, I’m a lawyer, but I’m not your lawyer. All information in this post is provided for educational purposes only and should not be considered legal advice for any specific person or specific situation.
Remember – Be Smart. Be Legal.