Skip to main content

Trademark Identity Litigation

Craig Fochler, Chairman of the Intellectual Property Practice of Wildman, Harold, Allen & Dixon LLP, presented a discussion on the complex, multi-faceted process of trademark identity litigation. At the outset of the panel, he posed the broad question, "How does one succeed in litigation?" According to Mr. Fochler, the answer is very simple: preparation and attention to detail.

Although many people equate preparation with a lot of effort, Mr. Fochler suggests that trial preparation does not require one to immediately jump in and start working on tasks. Instead, one must first step back from the problem to think about what the suit is about, what the ultimate goal is, and how to accomplish that goal.

Narrative Building

Mr. Fochler strongly believes that a lawsuit like telling a story. "At trial you get to tell a story. The other side has a story too, and the winner is whoever's story is more persuasive."

There are several aspects involved in this story telling process. The first is whether to have a jury or bench trial, as selecting the proper audience for your story is very important. Different considerations go into choosing the right audience, such as the complexity of the case. "Usually," Mr. Fochler notes, "if you have a difficult story to communicate, there's a good chance that you don't want a jury, especially if you're dealing with something technical."

Client appeal is another major consideration when deciding between a bench or jury trial. "Generally, juries favor the small guy, and don't like the 'bad guy.'" Counsel should also think about the appeal of its witnesses - are they charismatic or hard to believe? Though it seems shallow, one must think about surface appearances when confronting a jury.

Before deciding on a bench trial, Mr. Fochler recommends reviewing the potential judge's past record. Some judges may consistently misapply trademark principles. He also warns counsel to be wary of judges who make up their minds right away and refuse to change their positions.

Plaintiffs in trademark actions are usually able to decide if there is a jury, while defendants are not always entitled to one. One way to avoid having a jury trial, if you're a plaintiff and there is evidence of intentional infringement, is to drop the damages claim. "Just go for injunctive relief and an accounting of profits, and the defendant won't be able to get a jury," Mr. Fochler explained.

Other important aspects of adequate trademark litigation preparation include a solid discovery plan, adequate witness preparation, and early development of the trial claim, which is the outline for your story. As the trial progresses, if you start spotting missing pieces of the outline, you should think about settlement. Experts are also very important, and Fochler advises the early evaluation of your expert needs.

Mr. Fochler concluded by stressing the appeal of a simply presented claim, and stated, "Don't over complicate the story or your main points will be lost."

Identifying and Protecting Trade Secrets

Craig Fochler next presented, on behalf of John Letchinger, a fellow partner at Wildman Harrold, the topic of identifying and protecting trade secrets, which are the most elusive and difficult assets to define. Mr. Fochler began his talk by citing reported statistics concerning Fortune 500 company assets. Twenty years ago, 80% of the assets were hard assets, and 20% were intangibles. A few years ago, the numbers switched to 80% intangibles, and 20% hard assets.

Mr. Fochler believes that both numbers are incorrectly low, in part because trade secrets frequently are overlooked, because they are not easily documented and labeled.

Although trade secrets can be simply defined as trade information that is a secret, getting courts to agree on what constitutes a trade secret has been anything but simple. Historically, parties seeking to protect a trade secret in court were required to satisfy a six-factor test. Fortunately, in recent years, courts have begun to relax their postures, and have become more liberal with what constitutes a trade secret.

Equally important, the Seventh Circuit most recently held that a trade secret need not be complicated to be protected. In Learning Curve Toys, Inc. v. PlayWood Toys, Inc., the 7Th Circuit reversed a district court JMOL finding that Playwood's design of a realistic looking and sounding toy railroad track took just $1 and under half an hour to develop was not a protectable trade secret. The 7th Circuit noted the Playwood design's novelty in the industry, the economic value to alleged misappropriator Learning Curve, and Learning Curve's own patent covering the design were factors pointing to the design's value and its eligibility for trade secret protection, with the time, effort, and money expended being a factor more relevant to trade secrets protecting compilations of data, rather than innovative designs: "We fail to see how the value of PlayWood's concept would differ in any respect had Clausi spent several months and several thousand dollars creating the noise-producing track. Accordingly, we conclude that PlayWood's lack of proof on this factor does not preclude the existence of a trade secret."

When judges look at what it takes to maintain secrecy within a company, they will often look at how big a company is and what their information sharing practices are. Mr. Fochler also noted that summary judgment efforts are routinely rejected in trade secret cases.

Mr. Fochler concluded by discussing reverse engineering as a legitimate way to uncover trade secrets. Reverse engineering is permissible only when it is done through legal means. Usually, in order to reverse engineer the information of a trade secret, the trade secret owner has to first authorize someone to distribute it.

Was this helpful?

Thank you. Your response has been sent.

Copied to clipboard