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Racial Justice Movements, New Law to Push 2021 Trademark Changes

Jan. 4, 2021, 10:55 AM

Social justice movements may spur some of the most compelling trademark storylines in the new year. Also ahead will be the growth of counterfeits online and a new federal trademark law.

The rebranding of Washington’s NFL franchise and Cleveland’s major league baseball team headline a broader shift of brands distancing themselves from what are seen as racist caricatures and references.

That leaves trademark practitioners to consider when and how to transition to new marks, and how to handle legacy ones. They also must figure out how to deal with trademark squatters trying to corner valuable registry real estate.

The social justice movements spurring companies to recalibrate branding decisions was “the most important trend we’ve seen in 2020 and will continue in 2021,” intellectual property attorney Suzanne Hengl of Baker Botts LLP said.

“It has a tremendous impact on all aspects, particularly as a trademark practitioner,” Hengl said. “Brands are looking carefully and critically at things they’ve been putting in the markets for decades, into which they’ve invested money, time and equity.”

Black Lives Matter itself has become a contested trademark space, with scores of applications for BLM and Black Lives Matter marks. But the messaging in the phrase and largely decentralized nature of the movement make it difficult to establish that people perceive use as a trademark rather than a message, trademark attorney Joel Feldman of Greenberg Traurig LLP said.

Other practitioners raised questions about what happens to problematic brands like Aunt Jemima and Uncle Ben’s that are cast aside. Trademark rights are defined by use; severing use of the mark severs rights. But companies also don’t want newcomers to revive the brand and usurp their products’ goodwill.

Most applicants for marks like “Aunt Jemima” may be squatters who’ll find it difficult to develop rights of their own, trademark attorney Theresa Conduah of Haynes and Boone LLP said. But some of the original companies may still look to find limited, relatively obscure use of old marks to preserve rights and block newcomers, she said—while still keeping their distance.

“It will be interesting to see how those marks are treated,” Conduah said.

Here are some of the other major issues to watch heading into 2021:

Counterfeit Pandemic

The Covid-19 pandemic spurred more online shopping—and the sale of more counterfeit goods. Brand owners will continue to grapple with retail trademark infringement in 2021.

“There has been a huge uptick in counterfeiters, with people mirroring websites. And they’re often outside the U.S. so trademark holders are left at a loss,” Jonathan Menkes, a trademark attorney at Knobbe Martens, said.

Tech platforms have increasingly stepped in to fill the broader gap in online trademark enforcement, though not necessarily consistently, trademark attorney Julia Matheson of Potomac Law Group PLLC said. She said there have been “increasing problems with the private law of the internet,” where platforms’ definitions of fair use, for example, diverge from that of a court.

Platforms generally claim to enforce strong anti-counterfeit policies. Amazon in particular has rolled out a number of high-profile anti-infringement initiatives, though their effectiveness has been debated.

Hengl said it will likely take legislative action to pressure platforms into becoming more proactive about combating infringement and counterfeiting on their sites, a broader goal of practitioners looking for better protection for their clients.

Trademark Modernization Act

Practitioners in 2021 will also have to deal with ramifications of the Trademark Modernization Act, enacted as part of omnibus spending legislation.

The law addresses the trademark registry’s “driftwood” problem: too many marks not being properly used but blocking new marks. It makes it easier for brand owners to attack fraudulent applications and registrations by creating an accelerated path to have applications and registered marks challenged.

That will allow prospective registrants faster and cheaper ways to ax phony registrations standing in their way, with less restriction on when they can make the challenge.

The measure also makes it easier to get an injunction during trademark litigation by shifting to defendants the burden of showing a plaintiff wouldn’t be irreparably harmed without an injunction. That could help litigants stop any bleeding of their brand’s value resulting from infringement immediately rather than waiting for litigation to conclude.

Trademark attorneys have long bemoaned courts’ frequent application of a 2006 Supreme Court patent case to trademark law. That ruling in eBay v. MerchExchange LLC put the burden to show irreparable harm—a key element in securing an injunction—on the plaintiff. But unlike patent infringement windfalls, courts generally can’t fix damage to consumer perceptions at issue in trademark cases, attorneys say.

Booking Fallout

Several practitioners also said they’re curious to see how the Patent and Trademark Office treats an influx of applications after the Supreme Court found Booking.com could be registered. The PTO can no longer categorically reject generic terms plus a domain like .com, though protection may be thin.

New PTO examiner guidance essentially repeated the court’s decision, which noted that applicants still had to show that consumers recognized such marks as indicative of a particular source. Consumer surveys—which can cost tens of thousands of dollars—will be key, trademark attorney Stephen P. Demm of Hunton Andrews Kurth said.

“There are more than 800 dot-com applications since that decision came out,” Demm said. “I imagine that’s going to continue.”

To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editors responsible for this story: Keith Perine at kperine@bloomberglaw.com; Renee Schoof at rschoof@bloombergindustry.com

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