Is it “trademark bullying” or just protecting what’s yours?

August 17, 2012

Trademark GorillaI grew up in Duluth, Minnesota, where there is a fairly well-known local insurance agency that shares its name with the last name of the man who founded it. Unfortunately for him, his last name is the same as the name of a famous jewelry company.

Now, this jewelry company markets itself by having celebrities wear its baubles on the red carpet and often buys the pricey back-cover advertisement on magazines like Vanity Fair and Vogue. You might think it would not be all that concerned about an insurance agency in Duluth (population: 86,265, not including the million or so tourists this time of year) that has a name similar to its own.

But you’d be wrong.

The insurance agency did get sued for allegedly infringing on the jewelry company’s trademark and the two eventually settled. They did not disclose their terms, but the insurance agency’s owner did get to keep doing business without changing his name and he said no money changed hands.

That is a fairly rare outcome these days because of a trend some are calling “trademark bullying.” There is some concern that small businesses are being subject to ever more-aggressive allegations of trademark infringement from big companies whom you’d think would have better things to do. Because they don’t have the money to fight these bigger, wealthier trademark holders, many small businesses simply give up and change their names.

Thinking about it that way offends my very American preference for the underdog. I don’t like the idea of entrepreneurs taking the very brave step of starting their own businesses only to later get manhandled by proverbial 800 lb. gorillas.

But then again, that’s a very sentimental reaction. Big companies did not get where they are today by being passive. They got that way through building a name for themselves and carefully curating the impressions that name brings to mind in consumers. Naturally, that takes a lot of effort and a lot of money.

Furthermore, trademarks are one of those “use it or lose it” privileges; if you aren’t proactive with regard to your trademark, you will lose it either to genericide (Kleenex, anyone?) or to a rival who snaps it up once you let it lapse. So, is it fair to fault a trademark holder for being too aggressive? Maybe not.

What do you think?