THE FIVE THINGS I'D CHANGE ABOUT IP LAW
1. Rediscover the public mind.
One of the first changes I'd make in trademark law is to rediscover the public mind as an essential element in the creation of rights. In my book Guiding Rights: Trademarks, Copyright and the Internet, I go into this issue in the chapter entitled "Trade Dress Protection and the Problem of Distinctiveness." The recent history of trademark law reflects a regrettable trend toward a point where there is little or no attention paid to the connection between the mark at issue and the public's reaction to that mark. This has proceed to the point where an appellate decision has stated that the issue of trademark rights is the relationship between the mark and the product, "not whether . . . consumers associate the design with its source," and "not the relationship between the [mark] and the consumer. See Stuart Hall Co. v. Ampad Corp., 51 F.3d 780 (8th Cir. 1995). As discussed in Guiding Rights, the resulting analysis then bears little relationship to whether the public will react to the mark as an indication of source. But that, of course, is what trademark law is all about.
A proper understand of trademark rights involves recognition that rights only exist when there is a connection between the mark with goods or services from a particular source in the public mind. It is not enough to simply select a compelling mark and affix it to a product. This was long ago stated by Justice Frankfurter in Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316 U.S. 203 (1942):
"The protection of trade-marks is the law's recognition of the psychological function of symbols. . . . Whatever the means employed, the aim is the same - to convey through the mark, in the minds of potential customers, the desireablity of the commodity upon which it appears. Once this is attained, the trademark owner has something of value."
Thus, a mark has no value as a trademark unless and until there is recognition in the public mind.
More recently, the Seventh Circuit in Zazu Designs v. L'Oreal, S.A., 979 F.2d 499 (7th Cir. 1992), similarly recognized that an ongoing plan to use a mark or even sales to a small inner circle created no rights, stating: "Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated."
In other words, there is no protectable mark unless there is a relationship between the mark and goods from a particular source in the public mind. This necessary consideration is seems often overlooked or misunderstood by both trademark owners and the courts. My first change would be to rediscover the importance of the public mind in all dialog about trademark rights.
2. Eliminate rights in gross mentality
My second change, admittedly related to the first, would be to eliminate the "rights in gross" mentality. By this, I mean the notion that a trademark creates an absolute and exclusive right. One sees this tendency on both sides of the rights issue. A trademark owner may have the view that no one else may use its mark for any purpose. The junior user may believe there is no infringement if the mark it adopts is not identical to another's trademark.
Both views are mistaken, of course. The rationale for protecting trademarks is preventing deception of the public, not to protect a right in gross. Again the effect of the marks in question on the public mind is critical. Some uses of another's mark are permitted because they do not deceive the public. The use of nonidentical marks on related goods may still be an infringement because they deceive the public.
3. Require ADR before litigation
Litigation is extremely expensive, almost shockingly so to most clients, and prohibitively so to many. The 2003 Report of the Economic Survey by the American Intellectual Property Law Association found that estimated total cost of a trademark infringement suit where less that $1 million was at risk ranged from $200,000 to $400,000. The litigation cost in larger matters reached up to $4 million for a single case. The result is that even successful litigation may end up substituting a financial problem for an infringement problem. We also know that most civil cases, over 90% in federal statistics, never go to trial.
My change would be to require all trademark litigants to try forms of alternative dispute resolution before proceeding with the expense of discovery and trial. As both a mediator and as an advocate in mediations, I know that facilitated negotiations can lead to resolutions at substantially reduced cost. Unfortunately, ADR is underused for many reasons. Clients don't want to be the first to blink. Litigators don't want to appear weak, loss control, or disclose information. Whatever the reason, the hesitancy to use ADR (either mediation or early arbitration) could be overcome by making it mandatory. Some jurisdictions already do. More should. An early effort to settle, facilitated by a competent neutral could, I believe, save the courts and clients a great deal of money.
4. Improve ICANN UDRP submissions
As an ICANN UDRP Panelist with over 100 reported decisions for WIPO and NAF, I have read many submissions over the past five years, some very good, many bad. The fifth thing I'd change would be to improve the quality of the submissions. I recently spoke on UDRP advocacy at seminar hosted by DePaul Law School and the Intellectual Property Law Association of Chicago, and offered these six tips:
1. The Complaint (or Answer) should be a brief. This is your only chance to argue your position. Treat it like a memorandum in support of a motion for preliminary injunction or summary judgment by presenting your case as an advocate. Mere notice pleading allowed in our federal system is not effective for the circumstances.
2. The Pleading should be brief. Although the providers' limitations on length are largely ignored and exceeded, as a Panelist I urge you to remember that effective legal writing is brief and to the point.
3. The Pleadings should follow the Policy. Follow the elements of the Policy in stating your position. Remember that the Panel must address each of these issues. Make it easy for the Panel to decide in your favor by organizing your argument around each element of the claim or defense.
4. Support your position with proof. You need more than bald allegations to prove rights and bad faith, and you will find an increasing number of cases in which complainants are called upon to make additional submissions or lose their claim due to lack of proof. Strong submissions present evidence by way of exhibits and short affidavits. But don't merely shovel in piles of documents. Remember point 2.
5. Make good use of supporting authority. Give cases to support your argument and show why the cases are relevant. Avoid merely citing cases. There have been over 7800 reported UDRP decisions. Don't assume the Panel knows the result and reasoning of each case you cite. Help the Panel by providing at least a parenthetical on the cases you cite.
6. Recognize the limits of the Policy. The Policy is designed to address cases of cybersquatting involving protectable trademarks. It is not intended for contract disputes, garden variety infringement cases, defamation claims, or personal names that are not entitled to commercial protection. Adverse decisions are often the result of claims that obviously stretch beyond the scope of the Policy. Matters outside the scope of the Policy are better directed to appropriate civil courts.
5. Create regionalized registrations
My fifth change would be to create regionalized trademark registration systems. One of the fundamental principles of trademark law is territoriality. Trademark rights are deemed to be specific to a single country. Outside the United States and a handful of common law countries, civil law prevails and rights in trademarks arise from national registration, rather than use. In our global Internet world, however, the continued reliance on national jurisdictions doesn't fit the market reality. Further, the cost of worldwide protection is incredibly expensive. I recently advised a client that she could expect an average cost of about $2000 per registration. She wanted to protect twenty marks used in a worldwide Internet business. With about 250 jurisdictions accepting trademark registrations, the cost obviously is huge.
There has been some movement toward regional registries. Of note are the Benelux registration for Belgium, Luxembourg and the Netherlands, and the CTM for the European Community. More can and should be created. Doing so could reduce the cost of registration and afford protection for territories that better fit regional markets that span the borders of of several countries.