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INTA, ‘Ghost’ Brands and Trademarks

INTA, the International Trademark Association is having its Annual Conference in Berlin, starting today. All kind of interesting subjects that brand owners keep happily busy are being dealt with in workshops, break out sessions and the like.

Subjects like "How to Combat Counterfeit", "Taxes and Trademarks" and of course the CTM (Community Trademark) are on the agenda. A more frivolous subject "Why We Do What We Do?" is being offered, as the program describes it "Why it is that trademark professionals seem to enjoy their jobs in ways that practitioners in many other areas of the legal profession do not?" (never realized that we as IP consultants and patent merchant bankers do not enjoy our jobs).

So what's missing in the INTA conference that should be on the agenda, prominently, I would say?

How unused, or ghost or "dormant" brands (and the legal part of it, trademarks) could be sold and subsequently acquired by "revival" companies and prepare them for a second life. Selling trademarks out of your existing portfolios is strangely enough an anathema in trademark world.
The only subject at the INTA conference that comes close is a subject with a rather lawyerly title "Europe, possible threats Arising from Dormant Marks". Must have been drafted by lawyers, which is not surprising, as (trademark) lawyers are trained to look at risks, not at opportunities. Hence the title oppugning the viability of a practice of active selling and buying of trademarks.)

Coincidentally, at breakfast, preparing for this blog, I read in this morning's International Herald Tribune an article (from New York Times Magazine, by Rob Walker, "How ‘ghost' brands can come back to life" on "brand reanimation". A Chicago company, River West Brands seems to have found a niche market by acquiring those ‘dormant' or ‘ghost' brands and using this "brand equity" to take a fresh approach to what companies seem to struggle with: what to do with brands and trademarks that are being abandoned in the big corporate environments. Examples enough: BRIM for decaffeinated coffee from (former) General Foods (now Altria), VOLKSWAGEN BEETLE, and close to (my) home: POSTBANK a well known trademark for a post office bank part of ING Bank, which was abandoned sometime ago.

Why is there not a more active divestiture practice in trademark world? We dealt with that in an earlier blog. Last year IPEG tried to raise interest in the subject at the Annual INTA conference. Not to much avail as it seems, as this year INTA does not cover the subject at all except to see it as a "threat", not an opportunity.

Who takes up the glove and starts the discussion in the trademark community?
To be continued

Standard setting Rambus FTC - EU implications?

Standard setting is a big issue in patent circles these days, not only in the US, but equally in Europe. One wonders therefore what effect, if any, the decision of April 22 of the US Court of Appeals for the District of Columbia Circuit in “Rambus Inc. v. Federal Trade Commission D.C. Cir.”, No. 07-1086) has for Europe.

The Court of Appeals found that the Federal Trade Commission (“FTC”) failed to demonstrate that Rambus Inc. engaged in conduct that was exclusionary "under settled principles of antitrust law". Setting aside the commission's orders restricting Rambus' ability to set licensing fees for its patents related to DRAM technologies, the court said that the (FTC) Commission failed to sustain its allegation of monopolization. The Commission's conclusion that Rambus deceived the standard setting organization in order to avoid limits on its patent licensing fees- enabling the monopolist to charge higher prices than it otherwise would have charged -"would not in itself constitute monopolization," the court held. The court also addressed whether there was substantial evidence that Rambus engaged in deceptive conduct at all, and it expressed "serious concerns" about the sufficiency of the evidence presented by complaint counsel.

From a very first reaction to the Rambus decision it seems that what really bothered the court of appeals was the facts, not the law. It can be inferred from the decision that the courts of appeal believed that the rules and disclosure requirements of the standard-setting body were not very clear or strong. The FTC found in its decision that those provisions were sufficiently clear, and the court should not have second-guessed the FTC on those factual findings. Under U.S. law, the CoA should uphold an agency's factual findings unless there is no substantial evidence supporting the findings. And the court of appeals does not say there is no substantial evidence. But, reading between the lines of the last section of the decision, I think the court disagreed with the FTC's factual findings. Since it could not properly reverse the FTC on that basis, we tend to think it did so on the law instead. If this quick reading is correct, the real lesson of the decision for standard setting operations in the future is that such bodies need to be very clear and detailed about the extent of disclosure and sharing that they are requiring of their members.

A second reaction is that it seems that the Rambus decision is limited because of a combination of the FTC's decision basis and its litigation strategy. As the court explained, the FTC found that Rambus's bad behavior prevented the standard setting body either from adopting a different standard or from extracting a RAND commitment. Since the FTC did not conclusively find the first alternative to be the case , the court of appeals required that the latter alternative must be sufficient to justify the FTC's decision. But, as the court noted, the law is not entirely favorable on the latter alternative as an antitrust violation. Knowing that, the FTC could have found that the latter alternative was, even if not an antitrust violation, nevertheless an "unfair" trade practice. But the FTC chose to rely solely on the antitrust theory and did not appeal on the unfair trade practice theory. So, it seems to me that the possibility of a finding of an "unfair" trade practice in this case, or at least in a similar setting in the future, is still quite possible, either in this case or in a future case. The court opinion suggests that the evidence in this case may not be strong enough to support an unfair trade practice conclusion. But it does not preclude the FTC from making such a determination. And it certainly could do so in other future cases as well. Consequently, the Rambus decision does not fully insulate companies against such allegations in the future.

With thanks to James B. Altman, Miller & Chevalier, Washington