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Feedback Loops in Trademark Law

A fascinating dynamic in trademark law is the interplay between public perception of trademark rights and the rights themselves.  Driven by a desire to monetize the value of marks in new ways, especially by licensing, mark owners sometimes can create their own realities, broadening their rights and shrinking the public domain.  A couple of recent developments illustrate the process.

“Tweet” is in widespread use as either a verb for the act of sending a message via Twitter or a noun for the message itself.  Variants of “Tweet” also have been claimed in applications for registration of trademarks by Twitter and others for a variety of goods and services.  Because of the ubiquitous nontrademark and occasional trademark uses of “Tweet”, Twitter thus far has been unable to register the term as its own mark.    Thwarted at the United States Patent & Trademark Office (“PTO”), last month Twitter filed a civil action in district court in California in an effort to cancel a registration of LET YOUR AD MEET TWEETS held by a company named Twittad.  Were Twitter to succeed in actions like this, it could prevent others from referring to Tweets, in marks or in otherwise, without paying a license fee.

Closer to home, earlier this year Virginia Tech tried to ban a local company from using HOKIE REAL ESTATE as its name.  Of course, “Hokies” is widely used by fans and the press to describe Tech students, and Virginia Tech doesn’t sell real estate, act as a broker or license anyone to do those things under the term.  Yet, it does grant licenses to sell all sorts of merchandise under the HOKIES mark, and (like other mark owners) would like to expand the range of goods and services it licenses.  The parties settled this lawsuit in September, with the owner of the real estate company acknowledging Tech’s rights in HOKIE, but getting in return a royalty-free license to use the term with HOKIE REAL ESTATE as well as free advertising space and even game tickets.   The real estate firm got off the hook and a few goodies, but Virginia Tech is the real winner.  The license effectively expands its trademark rights, and gives the school leverage to claim rights in other related fields.

Other examples are not hard to find.  “March Madness” is a phrase universally used by the media and public to describe the NCAA’s basketball tournament (it was first used in connection with the NCAA by the media in the early 1980s).  In addition, the term was used since the 1940s by an Illinois high school basketball association to identify its tournament.   The NCAA and the high school association contested each other’s rights in court, and eventually agreed to vest the mark in a new licensing organization, allowing both to use the phrase and, of course, for each to earn more licensing fees.

“Superbowl” is the name of the NFL’s championship game, so it should be a permissible fair use to refer to the game, even for commercial purposes.  Yet, the NFL licenses the mark so aggressively that merchants avoid the term even when they should not have to.  They came to refer to “The Big Game” instead, fearing the NFL will claim trademark infringement if they run an advertisement like “See the Superbowl on a new flat-screen TV.”  “The Big Game” eventually became so popular that in 2006 the NFL sought to claim it as its own mark.    In this instance, the league’s efforts to register THE BIG GAME were thwarted by not only the fact that the phrase is generic, but also because it had been used since 1902 to identify a football game between Stanford and Berkeley.  The league abandoned its application for registration in 2007.

These stories illustrate that trademark law is not defined just by statutes and case law, but very much also by how economic incentives (to garner licensing revenue; to avoid litigation costs) affect behavior, how behavior in turn affects perceptions, and then how those altered perceptions affect behavior.  The results of this feedback loop usually, though not always, involve creeping trademark rights and a shrinking public domain.    It also makes it harder to advise clients about the risk of infringement. 

For an excellent in-depth analysis of this dynamic, see an article by University of Richmond Law School professor Jim Gibson published in the Yale Law Journal, Risk Aversion and Rights Accretion in Intellectual Property Law.

Chris Mugel practices intellectual property law from Kaufman & Canoles’ Richmond, Virginia office.  –Christopher J. Mugel

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