How Nordstrom's And The USPTO Have Destroyed One Small Business

from the good-going dept

Jim Harper has the story of how the combination of a screwup at the US Patent & Trademark Office (USPTO) and a bunch of overly aggressive lawyers at Nordstrom's have made life incredibly difficult for a small business that has done everything right. That business, an "organic" lifestyle clothing company, filed for a trademark on those clothes using their company name: Beckons. After this small business filed for the trademark, but before that information was published, the big department store Nordstrom's filed for a trademark on the word "Beckon" for women's clothing. This happens at times, but the small company was there first, and the proper response from the USPTO is to reject the latter registration.

That didn't happen.

The USPTO flat-out screwed up and approved Nordstrom's application for publication (effectively moving the process forward). That meant that the small Beckons company had to spend thousands of dollars opposing Nordstrom's trademark registration. Thousands of dollars they shouldn't have had to spend if the USPTO had done its job right in the first place. Now, again, at this point, the facts are pretty straightforward, and even though the USPTO screwed up initially, the next step should be that the USPTO admits its mistake and everything moves on again.

But that's when Nordstrom's lawyers apparently got involved. Rather than recognizing the obvious truth (they have no claim on the mark Beckon and should give it up), they went into attack mode -- and tried to have the original Beckons trademark canceled, arguing that it really only was used for "yoga clothing" as opposed to a wider array of apparel. The case went to the appeals board -- meaning more legal costs for the small company. It was at this point, that the USPTO actually realized their original mistake, transferred Nordstrom's trademark app back to the original approver -- where it was rejected as being too similar to the Beckons clothing line. Again, at this point, despite the massive legal costs and mistakes and overly aggressive lawyers, you'd hope the matter would be done with.

No such luck.

Nordstrom's lawyers filed another complaint against the original Beckons trademark, claiming that they had abandoned their rights to the mark, once again sending everything to the Appeals Board (more legal bills!) only to have the filing dismissed, after it was realized that Nordstorm's original request to cancel the Beckons trademark was still out. And, in fact, that attempt to cancel the trademark is still active, but is in a long queue of cases to hit the Appeals Board -- meaning that the small company behind Beckons still has plenty more to spend on legal bills, and plenty of uncertainty concerning the simple trademark they filed for a few years ago.

While we often rail against problems with patent and copyright law, the purpose behind trademark law is entirely different It's a consumer or fraud protection law -- designed to make sure consumers aren't tricked into believing one product is associated with another company. Yes, it's all too often abused, but the small clothing company behind Beckons was doing exactly the right thing... and a mistake and some aggressive lawyering seem to have left them in a bad spot. The USPTO should fix things and Nordstrom's should drop its ridiculous vindictive legal attack against the much smaller company.


Reader Comments (rss)

(Flattened / Threaded)

  •  
    identicon
    Anonymous Coward, Feb 10th, 2009 @ 2:51pm

    Nordy's should be forced to foot the bill for legal costs of the smaller company as well as any "damages" that can be decided on, because the smaller company was delayed going to market by Nordy's incorrect and intentional acts.

     

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      identicon
      Steven, Feb 10th, 2009 @ 4:05pm

      Re:

      I've always though we needed some kind of loser pays system in the US, but there are significant problems with that (little guy loses to big company type of things).

      Maybe we need a system where loser pays winner equal to the losers legal fees. In this case Nordstrom should lose and hand over a big chunk of cash.

      In the case in the comments below (the gal with the IT Bags), if she loses she's not out much as she appears to be self represented.

      This would make people more afraid of the courts and help keep people from just getting outspent, as a large legal team represents a large liability.

       

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        MikeInVa, Feb 11th, 2009 @ 6:50am

        Re: Re:

        Steven - so what you're saying is that if you don't have the money to fight it, but you try, then it's no big deal if you lose. Which is complete BS. Going by your logic, she actually loses big because she would then have to pay Nord's legal costs. Your idea of a solution needs a little work.

         

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          Steven, Feb 11th, 2009 @ 11:41am

          Re: Re: Re:

          You have it backwards. What I'm saying is that if Nord's loses they have to pay her equal to what they paid their big legal team. If she were to lose she would have to pay Nord what she spent on legal fees (potentially nothing if she was self represented).

          Maybe it should only apply to the party that initiated the lawsuit.

          It's just an idea.

           

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      Anonymous Coward, Feb 10th, 2009 @ 8:24pm

      Re:

      And punitive damages for obviously trying to bully the smaller company with repeated efforts to make them incur unconscionable bills.

       

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    James C., Feb 10th, 2009 @ 3:12pm

    Ridiculous

    People, we should never tolerate this kind of crap. Tell everyone you know to stop shopping at Nordstrom until they drop the case and reimburse these women for their trouble. Outrageous!

     

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      Anonymous Coward, Feb 10th, 2009 @ 3:19pm

      Re: Ridiculous

      "until they drop the case and reimburse these women for their trouble"

      Why only until then. Just stop or don't shop there at all, FOREVER. Overpriced douchebags.

       

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    lavi d (profile), Feb 10th, 2009 @ 3:19pm

    Close to Home

    A close friend of mine is currently fighting TJ Maxx over the registration of "IT Bag".

    She was given initial approval for the registration.

    But then TJ Maxx applied for "The New IT Bag" a couple of weeks later.

    When they were denied because of her pending registration, they hired a lawyer to (in compliance with USPTO rules) to protest the final approval of her mark.

    This is a single woman, who designed and produced a fashionable and innovative IT bag. She doesn't have the money to hire a lawyer to fight TJ Maxx, and has spent a great deal of her time and money to fight them herself.

    It's pending...

    Plug:

    http://www.dreamitwear.com

     

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    Thomas, Feb 10th, 2009 @ 3:19pm

    Not a surprise

    Nordstrom's doesn't give a **** about any small companies. They firmly believe in the rule of "If we can pay more lawyers than you can, we will win." The general rule for all large companies is the same "we've got money so we can bury you." In their point of view the law and the rules aren't for them to obey; that's what they have lawyers for. And the USPTO doesn't really care either; why should they? Nordstrom is perfectly capable of bribing them too.

     

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    Anonymous Coward, Feb 10th, 2009 @ 3:19pm

    If there were any justice in this world, the Beckons gals should be able to sue the USPTO for their negligent handling of the trademarks.

    However, sadly, this would likely be impractical as well. Make that doubly so by the already exorbitant legal bills created by the USPTO's blunder.

    In other words, the USPTO is likely safe from the ramifications of their mistake due to the magnitude of their error.

     

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    Anonymous Coward, Feb 10th, 2009 @ 3:41pm

    Surprising to see this story here.......

    Usually this blogger talks against patents, copyrights and trademarks. Well, this is a first and I agree with him.

    I think these should sue USPTO and that company and recover all the losses due to their incompetence.

    Some tangential ideas. Couldn't they have abandoned this trade mark and put their energy into bettering their product?

     

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      Mike (profile), Feb 10th, 2009 @ 4:05pm

      Re: Surprising to see this story here.......

      Usually this blogger talks against patents, copyrights and trademarks. Well, this is a first and I agree with him.

      I've been quite clear that trademarks make perfect sense not as property, but as consumer fraud prevention. I have no problem with them in that sense. To say I've suggested otherwise is not true.

       

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    KD, Feb 10th, 2009 @ 3:46pm

    Yet another example ...

    This is yet another example that our legal system has replaced "The guy who can beat up everyone else gets his way" with "The guy who has a lot of money gets his way". I think most people would agree that the ultimate goal should be "The guy who is right gets his way", but how do we get from where we are to there?

     

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    Gene, Feb 10th, 2009 @ 4:24pm

    Exchange your shoes

    To protest, everyone who has purchased shoes from Nordstrom needs to "exchange" them for a new pair.

    Nordstrom orginally started selling shoes and they are famous for their no-hassle exchange policy on shoes, http://about.nordstrom.com/help/our-policies/returns-exchanges.asp

     

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    teknosapien, Feb 10th, 2009 @ 4:44pm

    Why should they drop it

    seems to me this is how big business got big, by killing the competition

     

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    JL, Feb 10th, 2009 @ 4:58pm

    Outrageous

    Couple a highly litigious society and large amount of monetary resources available to a corporate adversary and what is a small business owner to do?

    Reminds me of the Nissan.com lawsuits (Nissan Motors vs. Nissan Computer) which started in 99 or maybe 2000.

    Both that case and this one are essentially about a much larger corporation with deeper pockets bullying smaller companies into bending to their will by using the legal system to their advantage. File suit, injunctions, motions, etc. until the smaller business runs out of money, patience and/or time.

    All quite legal but ethically suspect. Hmm.. an Ethical Attorney. Sounds like an oxymoron.

     

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    Dan, Feb 10th, 2009 @ 7:09pm

    Corporate america just can't seem to understand why the public in general distrust them and retain an immense amount of disdain for their antics. Here we have a perfect example, talk it up folks, this story should go viral.

     

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      thomas, Feb 10th, 2009 @ 8:14pm

      Re:

      "Corporate america just can't seem to understand why the public in general distrust them and retain an immense amount of disdain for their antics."

      they are not just distrusted, they are HATED.

       

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    PA, Feb 10th, 2009 @ 8:45pm

    Behind every one of these examples of corporate behavior, there are individual PEOPLE who are making decisions. You can rail all day about Nordstroms, but I think the individuals -- our fellow citizens, who are perpetrating this kind of activity need to be called out by name. Don't let the people who do this hide behind the mask of a corporate nameplate. In this case, it is Mr. WILLIAM O. FERRON, who is the attorney representing Nordstroms. This is Mr. Ferron's handiwork. Here is his email and phone number in Seattle. BillF@SeedIP.com (206)622-4900

     

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    Anonymous Coward, Feb 11th, 2009 @ 5:47am

    .

    More importantly, the lawyer is being PAID by specific people withing Nordstroms, so if we follow the money, we end up boycotting Nordstroms anyway, as if we were going to shop there --

    BUT the negative publicity against Nrodstrums ... priceless!

    > Behind every one of these examples of corporate
    > behavior, there are individual PEOPLE who are
    > making decisions. You can rail all day about
    > Nordstroms, but I think the individuals -- our
    > fellow citizens, who are perpetrating this kind
    > of activity need to be called out by name. Don't
    > let the people who do this hide behind the mask
    > of a corporate nameplate. In this case, it is
    > Mr. WILLIAM O. FERRON, who is the attorney
    > representing Nordstroms. This is Mr. Ferron's
    > handiwork. Here is his email and phone number
    > in Seattle. BillF@SeedIP.com (206)622-4900

     

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    Phillip, Feb 11th, 2009 @ 6:45am

    It seems like they could counter-sue for filing frivolous lawsuits.

    Still, Nordstrom needs to be slapped down where it hurts: The wallet.

     

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    Phillip, Feb 11th, 2009 @ 6:46am

    It seems like they could counter-sue for filing frivolous lawsuits.

    Still, Nordstrom needs to be slapped down where it hurts: The wallet.

     

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    identicon
    na, Feb 11th, 2009 @ 7:19am

    bye bye another company

    I guess its yet another scummy big company pushing around the little guy, trying to drag them so far through the courts that they collapse then the big guy just "takes" whatever they want!
    well Nord is one company I used to use, but no longer. I hate this kind of behaviour from ANY company, and I've been mentioning their actions to as many people as I can, and posting links to techdirt all over the place, so now thousands if not TENS of thousands of people will probably end up hating Nord too. You reap what you sow Nordstrom...

     

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    identicon
    anon, Feb 11th, 2009 @ 7:24am

    BIG opportunity....

    With the way the US has "interesting" punitive damages laws, surely theres a niche opening for a no-win-no-fee lawyer firm to get in on this?
    just like those injury lawyer firms....they go after the big company for punitive damages (personally i'd say go for around 100x whatever the original costs were as a minimum).
    tv advert - have you been screwed around by one of america's corporations?
    Been screwed by a corporate bitch?....You could get rich!! (c) me 2009....hehehe

     

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    identicon
    One of the unthinking masses, Feb 11th, 2009 @ 9:23am

    So, the Patent and Trademark Office should be villified when a mistake in following the law is made (in the instant case), and celebrated when a choice to intentionally disregard the law is made (see previous discussions regarding denial of patentability of software inventions on incorrect basis)?

    I just finished reading A Tale of Two Cities, and I see the mob that freed Darnay with tears the night before the next day they called for his head is no longer in 18th century France, but sitting before their respective computers.

    My only question is, behind what cause would the Tech Dirt mob rally if this poor woman had a software patent that should have been issued except for Nordstrom's intervention?

     

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      Mike (profile), Feb 11th, 2009 @ 9:53am

      Re:

      So, the Patent and Trademark Office should be villified when a mistake in following the law is made (in the instant case), and celebrated when a choice to intentionally disregard the law is made (see previous discussions regarding denial of patentability of software inventions on incorrect basis)?

      We have never suggested that the USPTO should disregard the law.

      I don't understand why you would lie, but if you think you're proving a point, all you've shown is that you're lying.

       

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    identicon
    PA, Feb 11th, 2009 @ 4:17pm

    To those who want to focus on punishing Nordstroms:

    To Phillip and AC:
    I certainly understand wanting to punish Nordstroms. Boycott away if you like, but I doubt you will get enough people to join you such that they would even notice. The lawyer, on the other hand is the one who likely advised them to take this course of action in the first place. He's the one who personally stands to gain from it. He's the one who's actually making it happen, once he gets the go-ahead on his idea from the Nordstrom executives. He's also the guy who will likely advise his next client to do the same thing, if it was profitable for him this time.

     

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    Aaron Martin-Colby (profile), Feb 11th, 2009 @ 8:39pm

    Bad PR

    Nordstrom isn't exactly doing well, right now. I think they can ill afford the bad PR caused by a case of bullying like this.

    In the hopes that reps from Nordstrom read this, I'd like to make it known that this information will give me pause the next time I think about entering a Nordstrom or visit the website. I don't like to support companies that make mean jack-asses of themselves.

     

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    identicon
    It Bag Lady, Feb 12th, 2009 @ 7:54pm

    Stand up

    I'm the one mentioned that has TJX Companies after me in a similar to what Nordstrom's is doing, but so far it has not been as costly. I've been told by concerned friends to just change my mark...why bother with these people. But if people don't stand up, this kind of thing will never change. The attorney for TJX Companies very harshly told me I need to get my own attorney, he's obviously annoyed that he has to deal with me instead of a fellow attorney. Its like a divorce case, the attorneys waist all kinds of time fighting each other, and in the end they are the ones who gain by logging in lots of hours. Its up to regular people to keep it simple and not get caught up in a bunch of legal garbage.

    It isn't easy to represent yourself. You have to spend a lot of time researching and presenting correct documentation, but I think in the long run, the obvious and simple truth should come out.

    And, the USPTO needs to reassess how and why they allow these unwarranted oppositions to go so far.

     

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    Joe Dane, Feb 13th, 2009 @ 7:03am

    Spread the word

    We can only hope word spreads and Nordstrom's actions don't go unnoticed. I can only think Nordie's has a creative marketing team that could come up with an equally spiffy name at less of a cost - both financially and in the PR sense.

    *sigh*

     

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    todd32, Feb 15th, 2009 @ 11:15pm

    Registered Trademark

    Hello - I hope this is not too far off topic. As I understand it, MacDonald's Restaurant Company has a registered trademark: "I'm lovin' it." Does this mean that my company can in no way use the term "I'm lovin' it" in any advertising campaign or product subtitle in the future, even if I am not in the restaurant business? What if I run a hair salon and our new slogan is: "My new 'do? I'm lovin' it!"
    Look, I'm not necessarily against some "hip" advertising campaigns, but am I prohibited from using this phrase? It's certainly not tantamount to calling my business "MacDonald's Hamburgers", is it?

     

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    Thai Restaurant, Mar 1st, 2010 @ 9:36pm

    punitive damages

    And punitive damages for obviously trying to bully the smaller company with repeated efforts to make them incur unconscionable bills. best regards, AGEL

     

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    identicon
    i wanted you lyrics, Oct 5th, 2010 @ 1:38pm

    good info here

    The USPTO flat-out screwed up and approved Nordstrom's application for publication (effectively moving the process forward

     

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