Backcountry.com – A Cautionary Tale About the Consequences of Abusive Trademark Enforcement Strategies

Trademark owners have a legal duty to “police” their trademark. When a trademark owner fails to police their mark, they risk a bar on future enforcement of rights against a particular company, or complete loss of trademark rights. Most of the time enforcement efforts begin through the vehicle of cease and desist letters, which typically point out infringement, demand it to stop, and threatens litigation. If the letter doesn’t work, litigation may ensue. Such efforts are not only required by law, but when properly used, can help build a stronger, more reputable brand, and avoid of the loss of important legal rights. 

But what happens when a trademark owner goes too far? Enter the trademark bully. Trademark enforcement efforts are a balancing act that can lead to abuse – typically where a well-heeled trademark owner uses the threat of expensive litigation to bully typically smaller companies into giving up legitimate use of marks, even if their claim for infringement is weak (or worse, frivolous). In other words, a legally frivolous or baseless claim is asserted to intimidate another into folding because defending such an action or taking an offensive move—such as seeking a declaratory judgment—is expensive, time consuming, and emotionally stressful.

How do you determine whether a claim is baseless? That’s fairly complicated, but one must start with an understanding of what trademark rights are, how they’re obtained, and what infringement is. Trademarks represent the name and reputation of a brand. They are awarded to a person or business who first uses a distinctive mark on goods or services. Similar or identical marks can live together in different markets or businesses, so long as they don’t cause consumer confusion. Trademark infringement then happens when another uses a trademark (or a substantially similar mark) on competing goods and services without permission. The true legal test is whether or not a defendant’s use may lead to a likelihood of confusion in the average consumer.  The trademark doesn’t need to be identical, but it does need to be similar enough to an earlier mark to risk confusing the average consumer that the goods (or services) come from the same place (or company).

A number of large companies have been accused of trademark bullying in the past, but most recently Backcountry.com faced enormous backlash after adopting trademark bullying tactics to enforce its purported rights in the term “Backcountry.” The outdoor community caught wind of what Backcountry.com was doing, and Backcountry.com has since faced viral campaigns by consumers, outdoor companies, and advocacy groups alike who are calling for the boycott of the company and demanding remedial efforts be taken. A week after outrage ensued, Backcountry.com publicly apologized and committed to dropping many of its lawsuits arising out of the  term “Backcountry.” It’s too early to tell whether the company will be able to correct its wrongs with its consumer base; however, other companies can learn valuable lessons from Backcountry.com, and about the risks of vexatious enforcement efforts when it comes to their trademarks, and effective ways to fight back.  

First, when considering whether to police a trademark, a trademark owner must consider the legal imposition to police its mark, the merits of its potential claim, and the public reaction that enforcement efforts may provoke. This is to say, a trademark owner must consider the perceived harm it wishes to prevent or eliminate vis-à-vis the risks of PR backlash and being labeled a bully. In today’s digital and social media age, a backlash such as the one being experienced by Backcountry.com, may be more costly than any type of sanction or lawsuit. The type of negative publicity Backcountry.com (and similar trademark bullies) has received risks destroying the company’s brand reputation and turning away an entire industry of consumers. This is especially true when the base consumers are discerning and have a strong ethos they operate by, such as the outdoor and backcountry enthusiasts in the case of Backcountry.com.

Second, legally speaking, Trademark bullies also risk facing a lawsuit themselves. These lawsuits may include a declaratory judgment action seeking to have a court declare their activities unlawful, or a petition to have the bully’s trademark declared invalid or unenforceable.  A trademark bully may also face legal sanctions if they assert a claim that is objectively unreasonable. This has yet to be seen with Backcountry.com, but a risk that should not be overlooked. A declaratory judgment cancelling the rights to their trademarks would certainly leave a company in a far worse position than they began when initiating enforcement efforts.

For those businesses or organizations faced with a cease and desist letter where a company is attempting to exercise rights beyond a reasonable interpretation of what the law provides, understand you have options. You may pursue legal recourse by requesting a court or USPTO cancel the mark and award legal fees, or seek sanctions. This requires engaging in costly litigation. Creative non-legal responses should also be considered as a potentially more cost-effective means of combating a trademark bully. Specifically, utilizing social media can be extremely effective, and places bullies in the lime-light while pressuring them to cease predatory practices. Sometimes the court of public opinion can be just as powerful, if not more, at effectuating change than a court of law.

Just a reminder this blog isn not legal advice, and is intended for informational purposes only. This blog should not be substituted for actual legal advice which involves applying specific facts to law. But if you’re a large company and unsure about the risks versus benefits of your trademark enforcement strategy, or a small company unsure about the merits behind a cease and desist letter, we’d be happy to talk. Christina Saunders has over a decade of experience protecting and defending against trademark infringement claims, and you can e-mail her at christina@saunders-saunders.com  or call her at 303-396-0270.

What happens when trademark policing goes too far? Backcountry.com presents a cautionary tale.