For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

Two of our regular Kats are currently on blogging sabbaticals. They are David Brophy and Catherine Lee.

Thursday, 19 December 2013

The Court of Public Opinion: The Most Influential?

Last week, this Kat posted an update about the dispute between the Beastie Boys and GoldieBlox.  An anonymous commenter observed that

if you really want to settle a dispute you don't "press release" your response to the complaint. The Court of Public Opinion is being over exploited for IP disputes. [It’s] good to make the world more aware of IP but the teaching is not always as clear as an educationalist would like.
This Kat was instantly reminded of several other recent disputes in which the so called “Court of Public Opinion” had a significant effect on the outcome of the dispute, or, at least, on the reputations of the involved brands.  Over the summer, Hollywood starlet Jessica Alba and her baby and toddler products company, The Honest Company, were vilified on social media by the fans of mom blogger Bunmi Laditan, the creator of The Honest Toddler blog, after Ms Laditan used social media in response to The Honest Company’s objection to her trade mark application, which The Honest Company believed was similarly confusing to its own registered The Honest Company and Honest Baby trade marks.  [This Kat penned a post on the dispute, here.]  The Honest Company had merely taken what this Kat thinks was a reasonable action to block The Honest Toddler's trade mark registration with the US Patent and Trademark Office, but it had not sought to prevent The Honest Toddler from using its marks on the Honest Toddler blog.  Yet, the Honest Company ended up defending its actions on Facebook, Twitter, blogs and other social media sites.

More recently, and among many other examples, bicycle brand Specialized found itself fighting two trade mark battles in the Court of Public Opinion.  The first dispute began when Specialized sent a cease and desist letter to a Canadian bike shop called Café Roubaix, which Specialized felt was too similar to the Roubaix brand name it uses on its endurance bikes. [Katpat to Kevin Cordina, Olswang!]  Café Roubaix posted information about Specialized’s claim on social media.  The response from bicyclists worldwide was swift and highly critical of Specialized acting like a Goliath attacking David.  Specialized quickly retreated, and Café Roubaix owner David Richter posted this on Facebook:

I had a great conversation with Mike Sinyard [CEO of Specialized] today, and I am happy to let everyone know that things will be working out fine. We thank you for your continued support. You have all been so very awesome to us!

Social media seemed to have won the day.  Or did it?  It was noted on bikeradar.com that Specialized may have backed down, not only because of the significant negativity directed at the brand on social media, but also because it does not actually own the Roubaix trade mark.  It takes a licence to the brand name from Advanced Sports International.  However, in the US and in some other jurisdictions, an exclusive licensee has standing under certain conditions to sue infringers in its own name without needing permission from or participation by the brand owner-licensor [Canadian Kat friends, is this the case in Canada?]  
 
Just days after the social media snafu with Café Roubaix, Specialized was the target of another social media attack.  This time, the dispute stemmed from Specialized’s assertion that the brand name Epix used on cycling gear and apparel infringed Specialized's Epic brand’s trade marks. After receiving a cease and desist letter from Specialized's counsel, Epix responded on social media with the following post on its Facebook page on December 11:
Sadly, Specialized is doing the same to Epix now. I received a letter today from their lawyers- Our logo is in their eyes too similar to their "Epic" MTB frames logo. The text is DIFFERENT. The logo stylization is DIFFERENT. We are not competing for the same clients (apparel vs frames). They are over-reaching, as they did with the Roubaix bike shop. They withdrew that case thanks to social media pressure, and we would be very grateful if everyone could support us in our efforts to fight this!
Once again, and in the same week, Specialized found itself the subject of social media attacks.  The brand’s reputation for building high quality bicycles and related accessories was taking a back seat to its growing reputation as a trade mark bully.  It quickly reversed course.  Specialized’s CEO and Founder, Mike Sinyard, posted a long apology to consumers on Facebook 
I Screwed up, and I own it
I would like to apologize and let everyone know I realize I handled this situation wrong from the start and I’m very sorry for that. As many of you have probably already seen by now, I went up to Café Roubaix to meet with Dan in person to apologize and make good with him. Café Roubaix will continue on with its name. [….] There are no excuses but I do feel like I owe it to you all to explain how we found ourselves in this situation, the lessons we've learned from it and, most importantly, how it will change the way we do things moving forward.
Over the past few years we’ve seen a massive spike in counterfeit products, and most of the riders have no idea these products are fake, which is extremely dangerous because the risk of failure on these untested products is extremely high. In one instance, the entire head tube and fork sheared off a counterfeit Tarmac, causing the rider who had no idea he was not on a genuine Specialized product to faceplant and destroy his shoulder. To give you an idea of how much this issue has blown up, 10 Specialized employees hunt fake products across 30 major ecommerce platforms, we've identified over 5,000 listings, worth $11,000,000 USD in counterfeit goods since January 1st of this year alone. This is about double what it was last year. Due to this we have recently gone after IP and trademark issues more aggressively in the interest of protecting the safety of riders and the livelihood of our dealers and their hard-working employees. [….]
In the deal with Café Roubaix, the wheels were the red flag that got the attention of our outside attorney’s who were already sort of on red alert for anything that pops up, although Café Roubaix wasn’t in the same camp as the counterfeiters, they still got caught in the crossfire. [….]
I heard you and you can rest assured I took it to heart. I realize now that we went too far with this aggressive approach and as a result and in some cases we hurt the local bikes shops and small businesses we wanted to protect. As a result we’re going to take a much closer look at all pending and future intellectual property and trademark issues, making sure to only pursue those that present a clear and obvious danger. The letter on Epix Gear was issued before the Café Roubaix story broke and has since been pulled.
I handled this very poorly and I own full responsibility. Dan at Café Roubaix and I have become friends and he’s happy with the solution. I hope you too accept my sincere apology. Like you all, I’m passionate about cycling and want to do everything possible to grow the activity we all love.
Continuing to handle this matter through Facebook, Epix responded on its Facebook page, alerting its fans that Specialized had confirmed that it would not pursue Epix for trade mark infringement.  Epix also thanked the fans for sharing the story through social media channels to raise Epix’s profile in this instance.  In addition, Epix thanked Café Roubaix as the company that “started this whole thing and made it so much easier for us. 


No, Merpel, not that kind of "spin."
Every dispute will ultimately have a loser, or at least a not-primarily-prevailing party.  With the Court of Public Opinion becoming ever more influential in legal matters, this Kat wonders if the real loser in IP disputes that are fought on the web instead of in court or in private settlement discussions is the value of maintaining a robust trade mark protection strategy.  If brand owners become shy about enforcing their IP rights for fear that the alleged infringer will use social media to create a consumer backlash against the brand owner, the brand owner's IP rights could eventually become eroded due to insufficient brand protection and enforcement. 
So, dear readers, with just a brief time left in my stint as a Guest Kat, I ask you to take a few moments to consider this:  Do you think that the more frequent uses of public relations “spin,” including defensive and offensive posts on social media, have been generally good for our field because of greater public awareness about intellectual property or do these tactics that take place outside of the judicial sphere cause IP owners to take actions that would otherwise be inadvisable? 

Grumpy Cat here
Cat-On-Bike here

10 comments:

Anonymous said...

There were reports that one of the reasons for Specialized backing down in its dispute with Café Roubaix is that the mark in question, "Roubaix" was actually licensed from Fuji and they were upset about Specialized registering the mark in Canada (where Fuji had not sought Registration). All very complicated but easy to understand the action of Speicalized, wishing to ensure maximum protection for its rather weak mark (taking into account the reputation of Roubaix in the cycling world and the famed Paris-Roubaix early season race over cobble stones).

Anonymous said...

I don't know how much the public benefits, but having a dispute in public often means the parties will play cleaner and be mindful as to how they come across. That perhaps means justice is more likely. The powerful are less likely to abuse the system and one cannot hide behind legal tricks.

Anonymous said...

The Court of Public Opinion has been a popular venue for IP disputes at least since the disputes about James Watt's patent. This said, Specialized appears to have been singularly hapless with respect to "Café Roubaix": any road cycling aficionado worth his salt will tell you that Roubaix is the name of a town in Northern France that happens to be one of the cradles of road cycling, and the finish of the rather well-known Paris-Roubaix race. Therefore, although the "Roubaix" trademark may seem desirable from a marketing point of view, and its enforcement possible from a purely legal standpoint, this was doomed to raise some hackles among just the kind of dedicated cyclist which constitutes Specialized's customer base. Add to this the fact that a lot of cycling fans have become rather allergic to this kind of brash commercial American behaviour, following the rise and precipitous fall from grace of a certain aggressive, pharmaceutically-enhanced Texan, and you can see how this dispute was bound to end badly for Specialized...

Anonymous said...

The Fuji aspect to the story is reported here:

http://www.bikeradar.com/road/news/article/battle-between-specialized-and-caf-roubaix-ends-peaceably-39282/

Anonymous said...

Anonymous at 8:44,

You obviously do not understand the real world, where propaganda outside of the courtroom is played out with zero accountability. In court, such actions can (and should) result in serious sanctions.

Court serves to equal the playing field - the opposite view of your post. Sure, it is not perfect, but it is immensely better than the court of public opinion.

Intellectual Property is perhaps one of the most difficult and nuanced areas of law. There are many current debates in IP (especially from perspective in the US) where the only way that certain factions can obtain what they want is to misrepresent the law and facts - to 'spin' and to attempt to obfuscate the general public with fallacies.

An easy example is the "Troll" rhetoric so rampant these days. Another is patent eligible subject matter.

Pedro Malaquias said...
This comment has been removed by the author.
ZuriCap said...

Therefore, although the "Roubaix" trademark may seem desirable from a marketing point of view, and its enforcement possible from a purely legal standpoint, this was doomed to raise some hackles among just the kind of dedicated cyclist which constitutes Specialized's customer base.

Anonymous said...

Let's not forget that running to the Court of Public Opinion may not work if the "David" is seeking to settle with "Goliath".

If you paint Goliath as a bad guy enough, he might decide he will actually be bad - AKA the excuse of the unfaithful partner.. if you are going to accuse me of cheating and treat me as if I did, I might as well do it.

Miri Frankel said...

@Pedro, I agree with you. In this age of social media, the importance of cooperation between legal counsel and PR representatives cannot be understated.

As some commenters have noted, David may deserve to win, and thus he takes his claim or defense to the Court of Public Opinion because he has limited financial resources to fight in court. However, there are many other instances in which Goliath has a perfectly reasonable claim and would likely prevail in court - but because the public loves an underdog, Goliath gets shamed on social media into giving up its claim.

I am not sure if Specialized would have prevailed in these two disputes had they proceeded in a judicial court, but I have represented other Goliaths who had to face every dispute with the handicap of being the Goliath in an environment in which people have deep mistrust of such large companies and assume they must have done something wrong.

Pedro Malaquias said...

Small correction in my post:
"David v Goliath fights are not always unfair and, in some cases, David clearly deserves to win, even if such might result in having Goliath's business destroyed"

should be read as

"David v Goliath fights are not always unfair and, in some cases, Goliath clearly deserves to win, even if such might result in having David's business destroyed"

As in every IP/ law matter, I would say that the answer to your question is clearly... "it depends".

Corrected version:

David v Goliath fights are not always unfair and, in some cases, Goliath clearly deserves to win, even if such might result in having David's business destroyed. The issues raised on Mr. Sinyard letter (security, fighting counterfeits, etc) are clearly valid concerns. Therefore, it is for me obvious that (in most of the cases) IPR owners should enforce their rights, despite the increasing power of the court of public opinion (and the resulting headaches for their PR professionals... but then again, that is also their job).

However, it is also true that there are clear abuses from IPR owners (even agreeing that the troll rhetoric might be overvalued). In several jurisdictions, attorney and court fees are simply too high and even the fights that one can win might not be worth fighting for. In those cases, the court of public opinion might be a SME sole resource. Let's hope it continues to be as effective as it is now.

Summing up, legal counsels and PR professionals should work together, as, some times, enforcing might not be the best option for a company. Defending IPR for the sole sake of their defence might turn out not to be the solution that brings more value to the company. Interesting times...

PS - An interesting solution is the one seen in the videogames world (at least, in the early days, as now almost everything is regulated by EULAs), in which the industry would not enforce its rights against certain infringement conducts (mods, videocasts, unofficial patches and developments) as such would have a positive impact in the "life" of the game, allowing for the creation of a bigger audience.

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