Intellectual Property Attorney

Active Trademark Enforcement Programs May Lead To Increased Licensing Revenues

As discussed in our previous blog regarding the appropriate level of trademark enforcement, trademark owners have an affirmative duty to police the marketplace for infringement. Failure to do so may result in the existence of a plethora of similar trademarks for similar goods and services, which in turn would cause diminution in the strength of the owner’s trademark. In fact, should a trademark owner acquiesce to a large number of infringing uses, the owner may find that its trademark has become so commonly used by third parties as to have very little value. As we previously reported, the key is striking a balance between lackadaisical trademark enforcement and an approach that is belligerent and overbearing.

As reported by The New York Times, the New York Metropolitan Transit Authority (“MTA”) has struck a balance in its trademark enforcement efforts that falls on the side of aggressive enforcement. The MTA now issues as many as six hundred cease and desist letters and infringement notices each year for acts of trademark and copyright infringement of its train line logos and associated designs. New York subway, rail and bus maps are protected by copyright, and subway line symbols are federally registered trademarks. The current level of enforcement is twenty times the 2005 level, which the MTA attributes to the proliferation of online shopping as a vehicle through which entrepreneurs can conveniently sell their infringing products.

As examples of its enforcement efforts, the MTA sent a cease and desist letter to a major upscale department store that was selling a dress adorned with a New York subway map. The dress is no longer available for sale. The MTA also went to court to challenge the use of “F Line Bagels” as the name of a deli in Brooklyn. The deli now uses the name “Line Bagels” instead. The MTA even denied a request from an amateur, all-female roller derby team called the “Grand Central Terminators” to conduct a photo shoot inside of Grand Central Terminal. The MTA stopped short, however, of enforcement efforts against “Grand Central OB-GYN,” presumably acknowledging that there would be no likelihood of confusion in the marketplace as a result of such usage.

While the MTA’s enforcement efforts may appear to be overbearing in some instances, the MTA receives $500,000 per year in licensing revenue, a portion of which comes from infringers who later strike licensing deals. While a level of licensing revenue would have been achieved regardless of its enforcement program, there is little doubt that by aggressively pursuing infringers, the MTA has clearly established a license as a requirement for using the MTA’s intellectual property. As a result, the MTA issues more licenses, the licenses are more valuable due to the reduction of infringers in the marketplace and licensing revenue has undoubtedly increased.

Trademark and copyright owners should consult with an experienced intellectual property attorney to evaluate the appropriate level of enforcement efforts with regard to their intellectual property rights.

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