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Trademarks are a valuable asset of any company, especially larger companies with well-established branding.  As such, it is understandable when companies often are aggressive in protecting their brand against danger, real or perceived.  After all, the threats against a trademark are very real.  Besides straight infringement, misuse or disparagement, rights-holders must also guard against their mark becoming generic, as well as against similar marks that may chip away at the uniqueness of their brand. However, an aggressive protection strategy is no longer without any risk.  Thanks to the pervasiveness of social media, larger companies may risk hurting their public goodwill by pursuing enforcement actions against smaller companies or individuals.

Increasingly, social and traditional media outlets have been circulating stories of trademark enforcement actions being brought against small companies by larger ones.  Almost inevitably, these actions are stylized and perceived as a ‘David vs. Goliath’ battle with the big corporation trying to bully the weaker company or business owner, even though the large corporation is legitimately, as described earlier, trying to protect a valuable asset.  As a result of such perceptions, public backlash can often ensue, mostly due to social media where companies and their consumers are barely separated from each other and tweets and Facebook posts can quickly go viral within a matter of days or even hours, causing potentially significant harm to the larger company’s public image and consumer goodwill.

Sweep the leg, kid!

Sweep the leg, kid!

Part of the reason for these outcries may be attributable to a general lack of public understanding regarding trademark law, but blame may also lie with companies who can be very overzealous in their protection efforts.  Consider for instance the very aggressive actions taken by the Seattle Seahawks against local businesses, fans and even a former player to protect their trademark interest in the number ’12,’ a mark which has yet to be approved by the USPTO.

Smaller companies on the receiving end of trademark enforcement actions have not been unaware of the negative publicity that larger companies may face and have become increasingly willing to leverage the power of social media as a way of leveling the playing field.  While large companies can leverage huge financial resources and retain top notch attorneys (the sheer strain on time and money in fighting a trademark dispute is enough to overwhelm many smaller companies into capitulation) , smaller companies can use social media to win public support (as well as direct public ire onto their opponent).  The result can be that a larger company will find what began as a trademark disagreement has been transformed into a public relations nightmare.

Consider the recent the dispute between Red Bull and Old Ox, a small craft brewery located in Virginia.  Old Ox filed a trademark application with the USPTO for its name and logo, a circle with an intersecting blue “x” spelling out the word “ox.” Red Bull filed an opposition to Old Ox’s application that argued that Old Ox’s marks would cause confusion with those of Red Bull’s in part because a) Old Ox intended to eventually use the mark to sell non-alcoholic soft drinks which would be in the same category of goods offered by Red Bull and b) the ‘ox’ and ‘bull’ are both ‘bovine’ animals and are virtually indistinguishable to most consumers.

Old Ox tried to negotiate with Red Bull, with little apparent success.  This resulted in Old Ox’s president Chris Burns venting his frustration with what he perceived to be Red Bull’s ‘strong-arm’ tactics and ‘bullying’ via an open letter posted to Old Ox’s website.

As far as rants go, this is a pretty fine one and gives some insight into the nature of negotiations at that point:

“Basically you are holding us hostage with a list of demands that, if agreed to, would severely limit our ability to use our brand. Demands like, never use the color red, silver or blue; never use red with any bovine term or image; and never produce soft drinks. Do you own the color red? What about fuchsia, scarlet, crimson, or mauve? Are you planting your flag in the color wheel and claiming those shades for Red Bull? Do you claim exclusive rights to all things bovine? Do you plan to herd all heifers, cows, yaks, buffalo, bison, and steer into your intellectual property corral, too?”

Burns concludes his letter with repeating Old Ox’s offer ‘never to produce energy drinks’ in exchange for Red Bull dropping it’s trademark challenge (snarkily signing off with “Sincerely and Uninfringingly Yours”).

While Burns’ and Old Ox’s goals in posting the letter are unknown, what is known is the negative publicity that resulted for Red Bull.  A quick scan of the ‘Comments’ section on Old Ox’s website reveals overwhelming support for Old Ox (many of whom indicate that they will boycott the energy drink).  A petition at change.org and a “Stop Red Bull’s Harrassment of Old Ox Brewery” Facebook page have been set up (which also include threats to boycott Red Bull products . . .along with a few potshots against lawyers…keep it above the belt, guys!).  Additionally, not only was the story run in the local press, but it was also picked up by The Associated Press and The Washington Post.

Widespread negative media coverage and calls for boycotts by consumers are never a good thing, especially for a company like Red Bull who has actively cultivated an image of being hip, trendy, and fun.  Despite the damage from the backlash, Red Bull still hasn’t shown any signs of backing down.

Old Ox isn’t the only company that has leveraged social media to rally public support to its cause.  Lowdownapp Ltd., an UK-based app maker, called Nokia a “corporate bully” before ultimately settling a trademark dispute with them.  Evolution Finance Inc., parent company of the website WalletHub, appealed to and received coverage in various media outlets regarding Major League Baseball’s objections to WalletHub’s use of a stylized letter W.

So with all that said, what are the takeaways from this new reality in trademark enforcement?

1. Over aggressive trademark protection strategies by larger companies are not risk-free.  It used to be (and is still the case) that larger companies could usually just overwhelm a smaller company with it financial advantage in a trademark dispute.  Today, a smaller company’s ability to garner support via social media creates the risk of unwanted attention and consumer backlash for the larger company, especially if it enjoys widespread public visibility.

2.  Pros and cons need to be weighed before trademark enforcement is begun. Given the potential for serious damage to their public reputation, it is no longer wise for larger companies to take a ‘shoot at anything that moves’ approach to trademark enforcement.  Careful consideration should be given before opposing action is taken of all factors including what the potential harm is, the risk, the actual likelihood of confusion, relevant industries and consumer bases, similarity etc. . .  Don’t get me wrong, trademarks are valuable and need to be protected, but prudence mandates that scrutiny be given to whether a threat is truly there.

3. Reasonable settlement demands should be sought. In Red Bull’s case, it appears to make much more reasonable sense to just accept Old Ox’s pledge to never enter the energy drink market, rather than insist on imposing all sorts of other restrictions.

4. Smaller Companies have a new weapon to use in a trademark dispute. While it’s unclear how truly effective it is in obtaining a settlement/resolution to a trademark spat, it’s undeniable that a small company’s ability to quickly get favorable public consumer and media attention (and inflict public relations damage on their larger opponent) by leveraging social media is a powerful tool that can be used to level the playing field (think of it as the “Poison Pill/Scorched Earth” tactic of trademark disputes).