There is a secret to preventing trademark infringement litigation. But on a weekly basis, we see that the secret appears to be hidden in plain sight. It’s a secret which might escape even law school administrators.
One thing is no secret: trademark litigation in the United States is very expensive. But avoiding litigation? Yes, there is a secret to that. It is just like the secret to success in so many things.
Do your homework.
A lot of people, especially in academic or trademark law circles, are fascinated by the trademark dispute between two Texas law schools. On October 14, a federal court granted the University of Houston’s motion for a preliminary injunction, which prevents South Texas College of Law from changing its name to Houston College of Law. Usually, trademark disputes are won on the basis that consumers (here, prospective students) would be likely to be confused. In this case, the court was heavily swayed by its preliminary finding that there would be, if not outright confusion, then at least some initial confusion by students. This is more akin to consumer bait and switch advertising: the consumer comes to Houston College of Law thinking it is the University of Houston. Eventually, they figure it all out, but meanwhile, the confusion is what got them into the “showroom.”
Was South Texas College of Law unaware of the University of Houston and its law school? That would seem on its face to be impossible, and there is no hint in the court’s opinion that South Texas even argued this.
But the judge considered research and facts showing that South Texas knew of certain similarities between the marks and knew that association with a larger major university could burnish its law school’s reputation, based upon the experience of at least one other law school.
Did they do their homework and decide nonetheless that there was no legal problem with their new name?
Did they miscalculate the risk? Or should they have avoided any risk, when weighing the upside to their preferred name with the downside of an adverse reaction?
Should they have tried to pick up the phone and tell the University of Houston of their plans, and seek their blessing? This may sound unreal, but it’s not. Companies – even fierce competitors – are known to often contact each other and talk about how they might be able to peacefully coexist with their trademarks.
Research is critical. Many infringement claims arise because the accused party never even heard of the plaintiff or its company. Conventional trademark research, including a search of registered and unregistered uses, is a mainstream trademark law practice. A good search will reduce the risk of an unknown surprise to a much smaller, more manageable legal risk. Research does not eliminate all risk because searches are still – though using powerful algorithms – a sort of needle in a haystack approach, scouring a huge vat of data to find possible problems. Trademark searches are sometimes under-inclusive. They can also be over-inclusive – including so many potentially similar names that it is difficult to distinguish trademarks used on similar goods and services from old names once used for now-defunct companies, or for products so far afield that they present no real risk of a viable infringement claim.
Everyone should do their homework – even schools. Here, the preliminary decision of this court easily (in my view) could have gone the other way based upon other factors, such as how strong (or more accurately, how weak) a city name like “Houston” could be for use in connection with an academic institution, and whether students really were confused (both sides presented market surveys on this topic – another common and costly part of trademark litigation). The court declined to find express bad intent by South Texas. Unless settled, the case will now head toward a full trial, where any outcome is still possible. Statistically, it is more likely that this case will settle.
Was this a risk South Texas assumed, and did they miscalculate? Or did South Texas not even see this coming? Maybe this law school was prepared for class. Maybe not.
This article originally appeared on Forbes.