Intellectual Property Attorney

Developing an Intellectual Property Enforcement Strategy (Part III of V) – Exercising Prudence in Intellectual Property Enforcement

Once a rights holder identifies unacceptable activity, the rights holder is faced with a new dilemma: how to prudently police such activity. This raises two central issues: (i) how to police unacceptable activity in a cost-effective manner; and (ii) how to avoid being perceived as “heavy handed” by fans. This article discusses how to distinguish between unacceptable and acceptable activity. Article IV in this series discusses how to avoid being perceived as “heavy handed”.

As a general rule, the goal in crafting an intellectual property enforcement strategy should be to proportionately respond to unacceptable activity. Proportionality dictates that expenditures in policing a brand should correlate with both the culpability of the unacceptable activity and the potential economic impact thereof. Each of these prongs is explored below.

The first prong of a prudent intellectual property enforcement strategy is proportionality between the aggressiveness of a right’s holder’s response and the culpability of the potential infringer. Put simply, the greater the culpability, the more aggressively the brand should enforce its rights. Here, “culpability” is used in two senses.

First, “culpability” is used to include intentional activity. For example, a deliberate infringer (i.e., someone attempting to pass-off counterfeit merchandise) should be treated with the highest degree of culpability. By contrast, an accidental infringer (e.g., an overzealous fan whose homemade movie just crosses the line into “deal breaker” territory) should be treated with a lower degree of culpability. Apart from the prudential reasoning behind such a rule, there are also legal reasons to consider such an approach. Arguably, the more intentional the infringement, the greater the potential damage to infringed-upon trademark rights.

Second, “culpability” is used to include the degree to which someone has violated one or more of the brand’s “deal breakers” whether intentionally or unintentionally. For example, an adolescent-oriented brand may place a high priority on preventing sexually explicit fan-generated content. Because of this value-structure, even an unintentionally infringing fan might be treated as highly culpable in the event that this fan publishes an explicit fan-fiction manuscript.

The second prong of a prudent intellectual property enforcement strategy is proportionality between the aggressiveness of a right’s holder’s response and the potential economic impact of the infringement. Unfortunately, as many rights holders already know, attorney’s fees and litigation costs have increased tremendously in recent years. Often, small-size rights holders can find themselves in the difficult position of having secured intellectual property rights only to be unable to afford the costs to police such rights.

Because of financial constraints, rights holders often need to be selective in enforcing rights and in how aggressively they do so. Moreover, the more popular a brand, the more likely there will be low-level economic activity which simply is not worth the expense of policing. Finally, as discussed throughout this series, appropriate fan-generated content can be a useful tool for engaging and cultivating a fan base.

One excellent example of how a major brand balances these concerns comes in the form of the STAR TREK® brand. Despite having significant financial resources, the STAR TREK® brand presumably recognized that it would be both prohibitively expensive and “bad business” to prevent all fan-generated content. In recognition of these facts, CBS and Paramount Pictures actually published “Guidelines for Avoiding Objections” for fan films based off of the STAR TREK® brand.

According to these guidelines, such fan films must be, inter alia:

“a real ‘fan’ production, i.e., creators, actors and all other participants must be amateurs, cannot be compensated for their services, and cannot be currently or previously employed on any Star Trek series, films, production of DVDs or with any of CBS or Paramount Pictures’ licensees.”

Similarly, the production quality of such films is limited inasmuch as the Guidelines prohibit fundraising more than $50,000 for the production.

Such tangible guidelines can go a long way in both clarifying the “do’s and don’ts” for fans as well as outlining when the brand should police such activity. Importantly, rights holders should consult with competent counsel before creating or publishing such guidelines – especially because such guidelines will likely become a central issue in any potential future infringement litigation.

Grimes LLC has developed a reputation as a world leader in successfully helping clients build, protect and monetize intellectual property. If your company wants to balance intellectual property protection with fan engagement, call us today for a free consultation.

Click here to return to Article I in this series: “Balancing Fan-Engagement with Intellectual Property Protection.”

Click here to return to return to Article II in this series: “Articulating an Intellectual Property Enforcement Strategy.”

Click here to explore Article IV in this series: “Avoiding the Perception of Being ‘Heavy Handed.’”

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