Increased trademark enforcement encourages false claims on small businesses

[28/12/2020, Patent and Trademark Office, “Engine Advocacy”, https://downloads.regulations.gov/PTO-T-2020-0035-0008/attachment_1.pdf, accessed 7/9/2024, LR]

III. There are improper takedowns and abuse of the current system, and policymakers should avoid shifting liability to e-commerce platforms which would exacerbate problems and lead to a sizeable removal of legitimate content

While the current doctrine of contributory liability is largely working well, there is still abuse of the system and few opportunities for startup e-commerce platforms and users wrongfully accused of infringement to fight back. Abusive trademark assertion or enforcement has an especially “deleterious effect on startups and smaller platforms that may lack the resources to respond properly to a dispute” between a purported mark owner and the user accused of infringement.27 This puts a fine point on the value of balanced frameworks, and strongly cautions against adopting any new legal doctrines which would make these forms of abuse easier or more profitable. And shifting more liability onto e-commerce platforms would end up escalating the removal of more legitimate posts and goods, which would hurt small businesses and creators who have posts improperly removed.

It is unfortunately common for purported trademark owners to overreach or send bad faith notices, for example, seeking to have non-infringing posts removed. As a number of smaller platforms have reported, spurious takedown notices can “be sent with the deliberate intent to exert unwarranted control over the free flow of information online. The rightsholder may intend to undermine a competitor or to censor critical speech, for example.”28 Examples of such improper or abusive takedown requests include:

● A restaurant obtained a trademark for the name of a popular southern dessert, and then asked a platform to remove websites that posted recipes to that dessert on the ground of alleged trademark infringement.29

● A small business owner that repurposes items—for example, making purses from food packaging or jewelry from building blocks—was subject to trademark infringement allegations for trying to sell those repurposed products on an e-commerce platform for homemade goods.30

● An author obtained a trademark on the word “cocky,” and sent takedown notices to an e-book platform seeking removal of other books with “cocky” in the title. Some of the accused authors went so far as changing the name of their book or abandoning merchandise associated with their works. A trade association for authors hired a lawyer to stop improper takedowns and have books restored to the platform.31

● Volkswagen filed multiple takedown requests to remove art of beetles from a digital art platform. In an apparent sweep to remove all images that were tagged with the word “beetle,” Volkswagen effectively asserted ownership over bug species and asked the platform to remove images a scientist had drawn of different species of beetles. The artist had to retain a lawyer to have her art restored, and lost revenue in the time her work was removed from the platform.32

● In the political context, a political action committee supporting Hillary Clinton issued a takedown notice against parodies of a campaign logo. And Ben Carson sent takedown requests against the use of his name on merchandise referring to his presidential campaign.33

● Fox sent takedown notices to Google seeking to have a science fiction book titled “Homeland” removed from the platform, suggesting this unrelated book (a sequel in a young adult series) somehow infringed trademark in the television program Homeland based solely on a common title (and no other relation or similarity).34

Moreover, in the trademark context there is no formal mechanism for e-commerce platforms to restore content,35 like the DMCA’s counter-notice procedure for restoring wrongfully removed content.36 A number of e-commerce platforms have reported seeing a conflation of copyright- and trademark-related takedown requests, as the notice-sender knows “the use of [trademark-related] requests significantly reduces the ability of users targeted by an accusation of infringement to challenge that accusation.”37

If platforms faced heightened liability for contributory trademark infringement, it would create an incentive for them to remove more legitimate, non-infringing content. Indeed, because platforms know even less about other entities’ trademarks, those platforms would have even less information than the mark owners to decide what to take down. The risk of liability when getting those questions wrong, though, would pressure platforms to increase takedowns of non-infringing posts.

These and numerous other examples reveal what is at stake. Not only must policymakers proceed with caution when considering changes to the law, because it would hurt startups and hinder competition and innovation, but there are also other interests. Shifting liability to platforms for alleged infringement they have no knowledge of or involvement in would: give rise to “concerns about freedom of expression” and “free access to information,” implicate legitimate uses of someone else’s trademarks online, and restrict the “development of new technologies, including those capable of both infringing and non-infringing uses.”38 It would require platforms to “radically contract” their legitimate offerings, which would hurt small businesses, Internet users, Internet-enabled creators, and consumers that do (or could) rely on such marketplaces.39 And that “overreactive impulse [to over-takedown] carries a disparate impact on small businesses and smaller platforms, who are often ill equipped to defend themselves against potentially false claims of contributory infringement.”40