In our previous adventure, we discussed a case where Marci Clark, aka romance author Marci Bolden, is suing her publisher and (one assumes) former agent, David Grishman of RedRock Literary. You may recall that there were some issues with the corporate defendants – namely, that they don’t actually exist any more. One was dissolved for failure to file annual reports and the other was transitioned from a corporation to a limited liability company.
Well, some updates:
First, the Court asked Ms. Clark to affirm that all of the defendants were from other states than Iowa, as this is required for diversity jurisdiction. She didn’t state that all of the Members of Pink Sand Press, LLC were from other states. The Court gave her two weeks to confirm this or fix it in this order:
Fourteen days was up today, but they filed a response yesterday. Since they had to do that anyway, you’d think the Plaintiff would fix some of the other issues, yes? Well, “some” is right: they did fix some, they did not fix others.
What they did fix was the Pink Sand Press issue. The Plaintiff filed a Supplemental Statement pointing out that they did not know that PSP had been dissolved when they filed the complaint, and attached a copy of the page from the MA SoS (it’s in the previous entry) showing PSP was dissolved. Here’s the Statement:
They also filed a First Amended Complaint (which, embarassingly enough, refers to itself as the “First Ameneded Complaint” but which I will refer to as the FAC) swapping out Steven Grishman, David Grishman’s father and the alleged sole Member of PSP, as “owner” of PSP, essentially treating “Pink Sand Press” as the assumed business name of a sole proprietorship. Once again, not a MA attorney, don’t know MA corporations law, but this does seem at least facially reasonable. They also assert Steven Grishman lives in Georgia, which means that all of the defendants are in fact from states other than Iowa and thus diversity is preserved. Anyway, here’s the FAC:
What they did not fix was the RedRock Literary Inc -> LLC issue. The FAC still lists RedRock Literary Inc as a defendant. No modifications at all were made related to this issue. I don’t know why. Perhaps it’s not necessary under relevant law and procedure. Perhaps the Plaintiff’s attorney still hasn’t noticed. No idea.
Anyway, that’s all – still no response of any kind from any of the defendants. Further bulletins as events warrant. Thanks for reading!
First, let me apologize for the long stretch between blog posts. Life happens. 🙁 Second, let me apologize for the pun in the post title: this isn’t a joke to Ms. Clark, and I don’t mean to diminish the importance of the matter. I have a condition.
Once again, fair Romancelandia is beset by the tides of war. Legal war, anyway. Prolific Romance author Marci Clark, whose most common pen name appears to be Marci Bolden, is suing her publisher, and her agent… who also appears to be her publisher. At least, he allegedly has a stake in/is an agent or employee of the publisher, Pink Sand Press, LLC, which has published most if not all of Ms. Bolden’s books to date.
If you’d like to see the case materials for yourself, you can either look on PACER for the case docket (Case 4:21-cv-00392-JEG-HCA, MARCI CLARK, Plaintiff, vs. DAVID GRISHMAN, REDROCK LITERARY, INC. and PINK SAND PRESS, LLC, Defendants) or click on the links below for the initial documents:
First, let us have a clear understanding: I am an attorney, but I do not represent any of the parties in this matter, and I have no interest in or association with any of them or any stake in the outcome. I write on this matter using only publicly available facts and my own original commentary for the purpose of education and outreach. If any alleged fact upon which my comments are based turns out to be untrue, then my commentary should be considered withdrawn or amended accordingly. Any allegation or statement of alleged fact in this post is just that: an allegation, not a representation that any given fact is true or not true.
That said, let’s dig in.
The Complaint is only eight pages long, so I’ll just go through it like Mike Dunford would, only far less rigorously. 🙂 It begins with the caption, which tells us that Ms. Clark is suing David Grishman (her literary agent,) RedRock Literary, Inc. which is presumably the corporate entity he literary-agents through, and Pink Sand Press LLC, her publisher. I’m going to call RedRock Literary “RRL” and Pink Sand Press “PSP” in this post.
Tangent The First: Agents Are Not Lawyers
That’s it. That’s the tangent.
I guess I should expand, though.
Now, some agents may also be lawyers, but if they are, you must retain them as your attorney, or they may not be providing legal services, only literary agent services. Lawyers have legally imposed fiduciary duties. They can be sued for malpractice. And, most importantly, lawyers have law licenses. Do a lot of canny old agents know more about publishing agreements than your average lawyer? Probably. But this is a Hell of a way to find out. Get a lawyer. If your agent tells you you don’t need a lawyer, get a lawyer anyway, and then get a new agent.
ANYway. On to the Complaint.
Now you remember up in the caption we saw that the defendants were David Grishman, RedRock Literary Inc, and Pink Sand Press, LLC?
Yeah, well, about that…
It turns out that neither of those corporate entities exists. RedRock Literary Inc. was converted to RedRock Literary LLC on December 7, 2018. (This date will be important later.) And Pink Sand Press, LLC, was dissolved by order of the Massachusetts Secretary of State on June 30, 2021. This usually happens because the entity didn’t file its annual report on time. (Since PSP has no filings with the MA SoS after its organization, I’m going to guess that’s why, but that’s just a guess.)
So what does this mean?
Well, mistaking RRL Inc. for RRL LLC is probably harmless error, and while I’m not a litigator, I’d expect that the court would grant leave to amend the Complaint to correct the defendant’s identification. The same parties appear to own and control RRL Inc. as owned and controlled RRL LLC, and RRL LLC would be the successor in interest to RRL Inc. anyway, probably. No big, really, although as a wise attorney taught me many years ago, the first thing you do when you get involved with a corporate entity is you check their standing with their home jurisdiction. This is a good example of why you do that.
But as far as PSP… well, this gets complicated. I don’t know what MA corporation law has to say on the subject, but in general, if an LLC is dissolved and can’t be timely reinstated, its rights and obligations devolve onto the Members. There’s no way to know how many Members PSP had, but it only lists two responsible parties, Mr. Grishman and Mr. George Tobia. Mr. Tobia appears to be a partner with Burns Levinson, a very large law firm, in their IP division. (See: https://www.burnslev.com/professionals/george-n-tobia) I’m guessing he helped PSP with their corporate formation and perhaps drafted some of their agreements. (We’ll get to those.) So I doubt Mr. Tobia is a member. Whoever the members of PSP are, they likely have received both the rights and the obligations of PSP if it is dissolved and can’t be reinstated.
This means that whoever the Members are, they may be liable for damages under this suit, as well as possibly having the rights to Ms. Clark’s works if the contract holds up. Frankly, this could go several different ways and I’m not a MA lawyer. So all I can do is speculate as above. As far as amending the Complaint to fix this, there is no fixing this. The entity does not exist. It can’t be sued. Plaintiff could (and should) ask the court for leave to amend to add the Members, either as known or as John/Jane Does to be identified through discovery, I would assume. But we’ll just have to put a pin in that.
Okay. Several hundred words later and we’re ready to start reading the actual Complaint. (Law: It’s Not Like Television.) I’ll break it up into sections, using the paragraph numbering in the Complaint itself.
Paragraphs 1-4: These just identify the parties. Ms. Clark is identified as Plaintiff, which means she doesn’t have a holding entity for her copyrights. This is probably a good idea for some professional writers, but that is beyond the scope of this post. In any event, she doesn’t have one. So she is identified as the sole plaintiff. The defendants are as listed as well, which means that the only one that actually exists is Mr. Grishman. For the rest of this post, though, I’m going to act like we’ve fixed that and RRL LLC and either the reinstated PSP or its Members as successors in interest are also proper defendants. So much for Paragraphs 1-4.
Paragraphs 5-7: Jurisdiction and venue are the subject here. First, the claim is that this is a proper Federal court case because the parties reside in different states and the amount in controversy is over $75,000 which means that “diversity jurisdiction” applies. That means that a Federal court is being asked to hear a case between citizens of different states because their home state courts might be biased or there might be questions of choice of laws that are more suited for a Federal court to resolve.
PROBLEM THE FIRST: Both the Literary Agency agreement (hereafter the “RRL Agreement”) and the Publishing Agreement (hereafter the “PSP Agreement”) have clauses that stipulate that Massachusetts law applies, and the RRL Agreement says that all claims must be adjudicated in Massachusetts. (The PSP Agreement is silent as to venue, which is weird.) So, assuming we fix the whole RRL Inc. doesn’t actually exist thing, RRL can just move to have the case removed to a Massachusetts court. Would they be successful? No idea. But it’s a real problem for Plaintiff, and their lawyer has addressed it by… pretending that it doesn’t exist. Which to be fair is what you usually do – let the defendant raise it, if they want to, and then respond appropriately. But still. Potential issue. Moving on.
The Complaint asserts personal jurisdiction over the defendants by saying they have “conducted business” in Iowa. I have no idea how much business the defendants have conducted in Iowa. If this was all done with emails and phone calls, this could be pretty tricky to establish. And again, this gets complicated fast. Suffice to say that the defendants may not only claim that they have a venue and jurisdiction clause to rely on, but even if they didn’t they have insufficient “nexus” (level of presence and activity) to give an Iowa court jurisdiction over them, and once more, the remedy is to bring the suit in Massachusetts, where they live and do business. That could also go a lot of different ways but is a potential issue for the plaintiff.
Likewise, the Complaint alleges that enough stuff related to the case took place in Iowa that an Iowa court is a proper place to hear the case. Again, no idea if that’s true or not. It’s entirely plausible, since that’s where the plaintiff lives and, presumably, does business. This is a related but different question – the previous paragraph was about jurisdiction over the defendants, and this is about jurisdiction over the case. But you get the idea. And if not, feel free to ask in the comments. 🙂
Paragraphs 8-28: These are the “recitation of facts,” which you see in almost all complaints. They set forth the general allegations that give rise to the underlying prayer for relief. In other words, Judge, first I’ll tell you what happened, and once I finish telling you what happened, I’ll tell you what I want and why what happened means I should get it.
The plaintiff alleges that she is a successful author, and that Grishman is a literary agent. It would be interesting to see PSP try to dispute that Ms. Clark is a successful author, as this is the sole content of the “Authors” and “News” sections of their website:
She further alleges that Grishman owns RRL and does his agent-ing through it. She then alleges that PSP is a publisher and literary promoter. Again assuming we fix the ghost entity issues, this is all noncontroversial. Then she alleges that Grishman is an operations manager with PSP. I guess he could try to argue with that but:
So yeah.
Plaintiff goes on to claim that she entered into an agreement with RRL/Grishman in December 2018 for him to rep her. Now, the Complaint only says “December 2018.” BUT WAIT. According to the RRL Agreement, the actual date was December 2, 2018. Remember that date I said would come up later? Later has arrived. It was five days after this that RRL Inc. became RRL LLC. This is extremely unusual. Why would RRL Inc./Grishman hold out an agreement to Clark and then, five days later, change their corporate form? You don’t do that on a whim. The charitable explanation is that they forgot to fix their representation agreement. The uncharitable explanation is… well, it looks fishy, leave it at that. Yet another weirdness, in any event. ASIDE FROM ALL THAT, this should also be uncontroversial, as the agreement is attached and is clearly dated accordingly.
About a month and a half later, Clark signed the PSP Agreement, which was executed by someone who appears to have been named “Steve Grishman.” (This will be important in a minute.) The Complaint then alleges that the PSP Agreement gave PSP a ten-year exclusive in Clark’s books, and required PSP to file copyright registration applications for them. This appears to be supported by the PSP Agreement.
Next, it alleges that no such registration applications have been filed. (Note: the PSP Agreement refers to “copyright applications.” Technically, this is incorrect: you don’t have to apply for copyrights, only for registrations. You would think that Mr. Tobia, an IP partner at Burns Levinson, would know this, but in any event it’s is not a big deal.) I have no idea if this is true but presumably Plaintiff’s attorney checked and if they didn’t, Defendants can just provide the receipts for the registration applications and refute the allegations.
Now we start to get into the seedier allegations.
Allegedly, Grishman represented to Clark that PSP was a startup owned by him and someone named Matthew Bernard. But, allegedly, PSP was really owned by Steven Grishman, Grishman’s father and presumably, the “Steve Grishman” who signed the PSP Agreement. (Toldja.) The Complaint never mentions Bernard again, so make of that what you will.
Next, it is alleged that Grishman (presmably through RRL) was to get 15% of Clark’s advance. This is likewise supported by the RRL Agreement and sustained by the PSP Agreeement.
Tangent the Second: Agents Are Terrible Lawyers
Speaking of the PSP Agreement, I am not going to do a breakdown of it in this post, but HOLY JIMINY CRICKET IS IT BAD. Any lawyer who told their client to sign that agreement should not only be sued for malpractice, they should be sanctioned by the disciplinary agency and, in my humble opinion, horsewhipped in the public square. It’s godawful. And yet, her agent cheerfully advised her to sign it. Now, part of that may be that he was double-dipping anyway so he really didn’t care that she was getting screwed. But I have seen publishing agreements that were just as bad agreed to by allegedly responsible and experienced agents, so, like I said, get a lawyer. A word to the wise suffices.
ANYWAY. Back to the Complaint.
Now we get into some allegations that one of Clark’s books required substantial unanticipated edits, which delayed its release. PSP then informed Clark that it was buying out the remaining two books in the series and having it completed by a ghostwriter, and she couldn’t stop them because the PSP Agreement allowed for this. The Complaint says that the PSP Agreement actually doesn’t allow for this: in other words, that this was what we in the law biz call a “material misrepresentation” and normal people call a “lie.” Upon brief review of the PSP Agreement, I sure can’t find anything in there about buying out series or ghostwriting, so unless the Defendants can come up with something here, I think that one goes to Plaintiff.
Next, the Complaint alleges (supported by the Exhibits) that there was an amendment to allow for copyediting signed later by the parties, but that PSP performed developmental editing in breach of its rights under the PSP Agreement and the amendment.
Due to these edits, the book fell further behind, and a new arrangement was allegedly made on May 10, 2021 to deliver a manuscript on September 24, 2021. Then in August of 2021, Grishman informed Clark that she was late in submitting the manuscript – which is odd, because it should have been PSP, not Grishman, who gave her notice of such a breach of her obligations. OH, RIGHT. Grishman works for PSP, so it’s actually in his interests for her to be in breach if what he/PSP wants is to secure the rights to Clark’s works. So yeah, there’s that.
On September 15, 2021 – at which time, allegedly, the manuscript wasn’t even yet due – PSP notified Clark that she was in default (which is logically impossible) and that her royalties would be held pending agreement on ending negotiations (What negotiations?) and termination of the PSP Agreement. Upon brief review, even if she were in breach, the withholding of royalties already accrued, on works unrelated to the manuscript in question, is not supported by the PSP Agreement nor should it be. I guess they could claim that they were entitled to recover advances under Paragraph 16 of the PSP Agreement, but they can’t do that unless and until the PSP Agreement is actually in the process of termination or uncured material breach.
Finally, Clark alleges that she has withheld the final manuscript because PSP is in breach of the PSP Agreement. Which, if PSP told her it was not going to pay her royalties timely, it inarguably was. At that time, her withholding the manuscript might also have been a breach – maybe, maybe not, it depends – but as Courtney Milan points out, it was still a smart move because if the other side breaches first, you do not look like the unreasonable one trying to preserve leverage if you can remedy the issue at any time. Which she could: if they had paid her and otherwise cured their own breaches, she could have handed over the manuscript.
Paragraphs 29-36: Count I, for Breach of Contract against PSP assuming it even exists or hopefully its Members if it doesn’t, is pretty straightforward. Paragraph 29 recites by incorporation the previous allegations of fact (as one always does in a complaint of this type.) Clark then alleges that she is in compliance with her contractual obligations, in that she delivered compliant manuscripts in a timely fashion. Conversely, PSP allegedly breached its obligations by not accepting the manuscripts and by not paying royalties timely. These breaches are alleged to have been in bad faith, and allegedly have caused and will cause Clark damages. Therefore, she asks for damages (“prays for relief”) as follows:
She wants PSP to have to stop publishing all of her works – in other words, she wants all of her copyright licenses granted to PSP to be terminated, although she doesn’t put it that way.
She wants PSP to certify to the Court that they have stopped publishing her works.
She wants unspecified profits, damages, costs, and attorney’s fees. This would be determined through the discovery process at a later date: she does not speculate as to how much it will be other than that it will be more than $75,000 (remember, she represented that in the diversity jurisdiction certification.)
She wants “other and further relief as the Court deems equitable and just,” which means, “whatever else I can come up with after discovery.”
This seems like a reasonable prayer for relief given the totality of the circumstances, is all I’ll say about what she’s actually asked for. Now, on to Count II.
Paragraphs 37-48: Count II, for Breach of Fiduciary Duty against Grishman and RRL. Again, we recite by incorporation the facts from above. Then we get into the meat of the matter: RRL, through and by Grishman, promised to be Clark’s literary agent, and therefore a fiduciary duty was created between them wherein Grishman and RRL had an obligation to faithfully represent Clark and act in her best interests in negotiating with publishers and otherwise exploiting Clark’s works. By not:
Telling Clark about Grishman’s direct ties to PSP (i.e. he was employed by it;) or
Telling Clark about Grishman’s indirect ties to PSP (i.e. his father owned it)
Grishman and RRL are alleged to have breached this fiduciary duty. It is futher alleged that this breach is the result of malice and fraud. After that Clark again prays for relief, this time against Grishman and RRL, as follows:
She wants money damages that will “fully compensate” her, which again are not further specified;
She wants the RRL Agreement nullified;
She wants unspecified punitive damages, doubtless related to the allegation that this was a malicious and fraudulent act;
She wants interest on her damages (not sure why she didn’t ask for this in Count I;) and,
She wants “other and further relief as the Court deems equitable and just,” which still means, “whatever else I can come up with after discovery.”
Paragraphs 49-54: Count III, for Fraudulent Concealment against Grishman and RRL. Repeat factual allegations, you know the drill. Then we get into Fraudulent Concealment which is… exactly what it says on the tin. (Note: Fraudulent Concealment, as alleged in this Complaint, is also sometimes referred to as/has a related type of tort called Fraudulent Misrepresentation. I am not licensed to practice law in Iowa or Massachusetts, so I defer to the presumably experienced litigator who drafted this complaint as to how it should be identified in this case.)
Specifically, Grishman and RRL made some representations of fact to Clark but failed to disclose other material information regarding the negotiation of the PSP Agreement, and they did it knowing that:
The undisclosed information was material;
Plaintiff didn’t know the undisclosed material information;
Plaintiff would only rely on the facts she did know about, and would likely act differently than she would have had she known the undisclosed material information;
That it would benefit them, and detriment the Plaintiff, if she acted in reliance on the facts she had absent the undisclosed material information.
Since that’s allegedly exactly what happened, Plaintiff suffered damages because of this fraudulent concealment of material facts and now, say it with me, prays for relief as follows:
She wants money damages that will “fully compensate” her, which yet again are not further specified;
She wants the RRL Agreement nullified;
She wants unspecified punitive damages, although she did not alleged that the fraudulent concealment was a malicious act – “fraud” is right there in the name so presumably that’s enough;
She wants interest on her damages; and,
She wants “other and further relief as the Court deems equitable and just,” which still means, “whatever else I can come up with after discovery.”
After that she just demands a jury trial and… fin. Rather brief for a Federal Complaint, but hey, this is a straightforward case. Allegedly.
Regarding the combined prayers for relief in Counts II and III, once more, I’ll just say that they’re not outrageous considering the facts as alleged. Of course there are at least three sides to every story (our side, their side, and the truth) and all we have seen is Ms. Clark’s side. So at this point our ability to evaluate the matter is somewhat limited.
But these allegations, if they are even close to the truth, are pretty damning. The PSP Agreement is horrible. Grishman had a gigantic conflict of interest when he induced Clark to sign it, which he didn’t disclose. He outright lied to her about who actually owned PSP. PSP’s actions regarding the submission of the manuscript and the withholding of royalties seem to be utterly without contractual support. It is, as the saying goes, a fine kettle of fish indeed.
As far as whether Clark can get her rights back/get out of the PSP and RRL Agreements? Maybe. It’s a big mess and the termination provisions of the agreements are likewise horrible. But here are some potential snags:
The RRL Agreement provides for binding arbitration. There is no indication that arbitration has been sought or entered into. However, given that the Plaintiff is alleging fiduciary misconduct which existed when the RRL Agreement was executed, she has at least an arguable case that the whole thing should just be tossed. If she can’t get it tossed, she may have to go to arbitration, and even if she wins, she may or may not get the RRL Agreement severed from the books Grishman/RRL has already repped. (See Paragraph 13 of the RRL Agreement.)
The PSP Agreement has some extensive termination requirements and procedures I’m not going to get into. But if they aren’t satisfied and the PSP Agreement isn’t just tossed due to the alleged fraud, she may still be stuck with them for the remainder of the ten-year term for the books they’ve already published at the very least. It depends.
The whole thing, honestly, is an utter quagmire and a sad example of what happens when you negotiate extensive contracts without legal representation. Again, I feel very bad for Ms. Clark, who, if the facts are as alleged, was outright cheated by someone she thought she could trust. But only time will tell.
Thank you very much for reading: please feel free to comment or ask questions below!
Neither, really. They’re quite common, and for the most part, good for consumers. A new article on IGN from Rebekah Valentine has some quotes from me and my friend Angelo Alcid!
NOTE: NOTHING IN THIS POST IS LEGAL ADVICE. THIS IS GENERAL INFORMATION FOR THE PURPOSES OF LEGAL EDUCATION.
From time to time, someone contacts me because they got a letter from a lawyer alleging that they put someone’s photograph on their website without permission and now they must pay a settlement fee or risk being sued. (I’ve even gotten one from an associate of the notorious Richard Liebowitz, which I consider a badge of honor.) They usually come from the US but I’ve seen them from France and Germany as well.
Here’s the thing: while they can and do make mistakes (and there are a few literal con artists out there doing this) by and large they usually did see the photo on your website. Maybe you thought it was in the public domain. Maybe you hired a web designer and the web designer just Googles their photo content. (Seen it. More than once.) And you probably didn’t get a license. Doesn’t make you a bad person, but technically, you’ve probably violated copyright law and infringed their copyright.
Now, to be clear: If you didn’t do it, or they’re lying, or they’ve got the wrong person, then you deal with that differently. You should get all the evidence together you can, and then either hire an attorney (HIGHLY RECOMMENDED) or write them a calm, clear, letter explaining why they’re wrong and bidding them good day. I said Good Day, Sir!
But assuming you did do it, well, don’t ignore them, or they may go to court and get a default judgment against you and you do not want to deal with that, trust me on this one. The problem must be addressed.
Here’s where the troll part comes in: they will claim they have a registered copyright, and are therefore entitled to statutory damages and attorney’s fees, and there will usually be some extremely scary numbers in there.
Those numbers are bunk.
However, like I said, if you let them go to court and get a default judgment, that bunk will be enforced by a judge, and again, you do not want to deal with that.
So the first thing you might want to think about doing is taking the photo down, assuming it’s still up. Don’t delete it: screenshot/backup the web page it’s on, make a note of the date, and then remove it from the live/public-facing page. Hang on to the original file for right now: now it’s evidence, and you want to keep it so you can establish what exactly you did.
Then you have a couple of options.
Option one, which is MUCH PREFERRED, is to hire an attorney who has dealt with this kind of thing before. Like, say, your humble blogger. But if not me, then somebody. These people are literally part of an industry, a copyright infringement monetization industry, and they have lawyers who do this all the time (often badly, but still.) Normal people don’t do well trying to lawyer. After you hire a lawyer, listen to them and do what they say. They can often negotiate a very small settlement by making clear that you have counsel and won’t be pushed into nonsense.
Option two is to tell them you can’t/won’t pay. This rarely works. They don’t care. They will just sue you and get a default and sell it to a collections agency. And then you will be hounded. Forever.
Option three is to try to negotiate a settlement. I can’t really tell you how much to offer because the variables are infinite. However, one standard approach is to try to find a similar photo on a stock website (or better yet the photographer’s own website) find out what the license would have cost, and then offer them that plus something for their legal fees. If you’re comfortable haggling, then haggle. If you’re not, reconsider Option One.
I feel like this post has a lot less actionable information than some I have made, and for that I apologize, but like I said: the variables are infinite. So, takeaways:
NEVER IGNORE THESE LETTERS.
You really should think about hiring a lawyer.
The numbers are bunk, offer a reasonable settlement.
As always, questions are welcome. Thanks for reading!
The applicant is claiming that the phrase FRIENDLY LOCAL GAME STORE is (or will be) a trademark for… game stores. “This is an approach,” as one of my favorite fictional characters is fond of saying. However, it is not an approach which is likely to meet with much success. The Trademark Office has already issued an Office Action initially denying registration on the grounds of, among other things, that this phrase is merely descriptive of game stores and so it cannot function to identify any particular game store. You can read the Office Action here:
Now, leaving aside the question of whether this application will succeed in and of itself, another question arises. Suppose you are an interested party who does not wish to see the registration issue, either because it will hurt you directly, or because you think it is inappropriate to grant exclusive rights over the use of the phrase in commerce in general. What can you do to reduce the chances that the application will be approved and/or that a registration will issue? Basically, two things. Some people can do both, some people can only do the first thing. Allow me to expand:
Letters of Protest
A “Letter of Protest” is a document that anyone can file with the Trademark Office during the initial examination of a trademark registration application. There are three distinct phases to a trademark application’s examination, and while a Letter of Protest can be filed during any of them, the burden on the filing party changes as the examination proceeds.
First Phase: Filing Date to Approval for Publication
Trademark registration applications, unlike patent applications, are not private or confidential, and are usually visible on the USPTO’s website within three to five days of being filed. So anyone who wants can see what applications are pending at any given time. If an interested person sees a pending application that they think is problematic, they can file a Letter of Protest, which is an informal filing that the USPTO will consider, but is not obliged to act upon, and which does not become part of the official record of the application.
The way they work is that you file them – there’s no fixed form – and a special office reviews them and decides whether they meet the standard to be forwarded to the Examining Attorney for their review as part of the examination of the application. If not, they basically pitch them. If so, they forward them to the Examining Attorney as a piece of evidence that they can use while determining whether the registration should issue. If you want to see the rules for how this works, here’s a link to the relevant page in the Manual:
Now, there are things which are appropriate for a Letter of Protest, and things which are not. First and foremost, what is not appropriate is a “merely adversarial” protest. This means you can’t just say, “That’s a stupid trademark,” or “I should get this trademark,” or “This Applicant is a trademark troll and they will use the fell power of a U.S. Trademark Registration for dark and loathsome deeds.” One or more of those may be true but they are not things the USPTO considers at this phase.
What is appropriate is evidence that the registration should not be issued because the trademark is either not capable of identifying a unique source of goods and services or that it will cause a likelihood of confusion with an already registered trademark or prior-pending application for a registration. In other words, either the mark is generic (like trying to register GAME STORE for stores that sell games,) merely descriptive (like trying to register FRIENDLY LOCAL GAME STORE for stores that sell games and many if not all of which presumably have some level of friendliness and locality as general attributes,) or someone else has already registered it or filed an application to register it before the application at hand was filed.
This is really important because what this does not include is evidence of prior use absent a registration or prior application. If someone else – either the person filing the Letter of Protest, or some third party – is already using the trademark but does not have a registration or a pending application, as far as the USPTO is concerned (at this stage) that is irrelevant. Examining Attorneys can only take registrations and pending applications into account, period. (Sometimes this produces what seem like nonsensical results but there are very good reasons for it.)
There are some other reasons which are accepted – for example, if there is a pending lawsuit about the ownership of the mark – but these are the big ones which most people reading this will care about.
So what goes in a Letter of Protest? Well I’m not going to get super specific because that might be legal advice and I won’t give legal advice to people who aren’t my clients. On that point, though, it is interesting to note that there is a Facebook group called “Trademark Watch Dawgs” that tries to coordinate the filing of Letters of Protest among online retailers to attempt to get ahead of trademark trolls. I occasionally post there as do some other trademark lawyers, but mostly it’s about non-lawyers assisting each other. They do have guides and sample Letters of Protest that they share.
In any event, generally speaking you set forth your grounds for protest, in an organized and specific fashion, and you include evidence to back them up. You must include some evidence, and not just allegations (that would be a “merely adversarial” protest.) But the evidence can be informally formatted as long as it’s understandable and coherent.
For instance, if you were claiming that “Friendly Local Game Store” was generic, you might include citations to the dictionary definitions of the words or to a trade industry document that used the phrase to describe all game stores and indicated that it was standard practice in the industry. If you were claiming it was merely descriptive in the specific context of the goods and services claimed, you might include PDF of web pages from discussion groups for people who like to buy things from game stores showing that they refer to lots of different game stores as “friendly local game stores.”
If you were claiming that someone else (you or a third party, doesn’t matter for a Letter of Protest) already has a registration or a prior pending application for a similar mark for similar goods and services, you would specify the registration numbers for issued registrations or the serial numbers for pending applications. Say, for instance, you had a registration for AVUNCULAR GAME RETAIL EMPORIUM for game stores. You might submit the registration number and evidence that the marks are confusingly similar, such as comparing the dictionary definitions of the individual words and then showing that combined, they had a similar meaning and there is a likelihood of confusion. This is NOT the same thing as opposing the registration: you are merely making the USPTO aware of potentially relevant information. If the special office thinks the marks or the goods are too far apart they will not submit them to the Examining Attorney and even if they do the Examining Attorney is not obliged to agree with your assertion or even acknowledge it.
Second Phase: Approval for Publication to Thirty Days After Publication
After the application is approved for publication, which means that the USPTO didn’t find any conflicting registrations or prior-filed applications and does not consider the mark to be generic or merely descriptive, all of the above requirements still apply to have a Letter of Protest considered. However, a new burden also attaches, which is that the Letter of Protest must show that the approval of the application for publication was “clear error.” In other words, if the Examining Attorney had known what was in the Letter of Protest before they did it, there is just no way that they ever would have approved the application for publication. An example of this would be the Examining Attorney just somehow flat missing an existing registration for the same mark for the same goods (which basically never happens) or evidence that the mark is actually a common and generic term of art in the relevant chain of commerce but the Examining Attorney, for whatever reason, did not discover this beforehand.
The special office will only approve a Letter of Protest if this standard is met: however, if this standard is met, it is a very good bet that the approval for publication will be withdrawn – in fact, absent unusual circumstances, the Examining Attorney has to issue a refusal, because we don’t cotton to clear error in these parts, nosirree Bob. So it’s a high bar, but the reward if you clear it is that your protest will almost certainly be successful.
Third Phase: More than Thirty Days After Publication to Issue of Registration
Even if the issuance of the registration is delayed because of a pending Opposition (see below) the USPTO will almost never consider Letters of Protest filed more than thirty days after publication. They can, but there must be extremely unusual circumstances, which are beyond the scope of this post.
Oppositions
The other thing you can do to try to stop a trademark registration from issuing is to file an Opposition. An Opposition is basically a mini-lawsuit filed in the Trademark Office, specifically before the Trademark Trials and Appeals Board, or TTAB. This is done by filing a Notice of Opposition and paying the filing fee. Oh, did I not mention the fee? There’s a fee. (There’s no fee to file Letters of Protest.) It’s US$400.00 per class. For the application I linked to above, despite the gigantic laundry list of services (see this post for why that’s not necessarily a good idea) there’s only one class, so there’d only be one fee.
Speaking of fees, while anybody can file a reasonable Letter of Protest with some care and consideration, as I said an Opposition is basically a mini-lawsuit, and for a lawsuit, you are going to want a lawyer. Which means you are going to pay legal fees of, almost certainly, thousands of dollars, and possibly more. (Still cheaper than an actual lawsuit, and definitely much faster.) It is not a thing to do lightly. Talk to a trademark attorney as early in the process as you can. The good news is that you can file extensions of time to file your actual opposition, so in a pinch, you can stop the clock for a month or two by paying a few hundred dollars.
Another difference between a Letter of Protest and an Opposition: anyone can file a Letter of Protest, but only someone with standing can file an Opposition. What’s standing? Standing is about three weeks in the Civil Procedure course in law school, that’s what standing is. But to summarize, standing means that you have an identifiable and specific interest in the outcome of the proceeding. Consumers, in general, don’t have standing to file trademark oppositions. Only someone who would specifically (potentially) be damaged if the registration issued can file one.
So if I sell similar goods and services, and I believe the mark is generic and it would make it impossible for me to reasonably identify my goods and services in the marketplace, I can file an Opposition. If I have previously used the same or similar mark in interstate commerce (which is important!) for similar goods and services and therefore believe I have superior rights to use it, I can file an Opposition. Those are the primary grounds for standing in trademark oppositions. If you file an Opposition without standing, it will be dismissed, either rejected at the outset if you don’t assert standing, or dismissed for failure to establish standing when the Opposition is underway.
A Notice of Opposition can only be filed after the application is published for opposition. Unlike a Letter of Protest, you can’t file an Opposition until the USPTO has basically decided to allow the mark to register. This is because until that happens, it’s not reasonable to begin a separate and resource-intensive proceeding, since the Examining Attorney might refuse the registration and make the whole thing moot. Once the application is published, any individual with standing may file a Notice of Opposition. Of course ideally you’d start getting ready to do this long before, but the actual window of time to file is from the date of publication to thirty days after publication. If you need more time, you can pay a relatively modest fee for a one or two month extension. But the time limit is the time limit: it cannot be further extended, for any reason.
Once a Notice of Opposition is timely filed, the Opposition proceeds according to a fairly straightforward and fixed set of rules. First, the “defendant” – the party trying to register the trademark – must file an Answer to the Notice of Opposition. The Notice of Opposition serves as the equivalent of the Complaint in a Federal District Court lawsuit (also called a Petition in some state courts.) If the defendant doesn’t file an Answer, the Opposition may be granted by default, which means that the trademark will not be registered. It’s possible to set aside such a default, but it’s not easy. Defaulting, as in any legal situation, is a Bad Idea.
After filing the Answer, assuming the Opposition survives (the Answer may have contained the equivalent of a Motion to Dismiss, asserting that the Notice of Opposition does not meet the minimum requirements for an Opposition, and if the TTAB agrees the whole thing might go away right there) next comes the discovery period, where the parties can force each other to produce relevant evidence regarding their respective claims to exclusive use of the mark. This takes the form of things like interrogatories (lists of allegedly relevant questions,) depositions, and requests for documents and records the other party may have. Again, this works pretty much like a lawsuit in Federal court.
After discovery, the “trial” begins, which consists of taking and submitting testimony. Unlike a Federal District Court proceeding, the testimony is not taken in the presence of the TTAB. Each party gets a time period to take testimony, and the other party must be allowed to cross-examine witnesses who are submitting testimony. The resulting testimony is submitted to the Board by the time the period for taking testimony ends. All testimony must be submitted in the form of written transcripts: the Board does not watch live video or audio nor review recorded video or audio.
Did I mention that this can get expensive?
Following the testimony period, each party submits a main brief, making their best arguments, in light of the discovery and testimony, as to why they should get their way. That is, the plaintiff (the party who filed the Opposition) argues that the registration should not issue, and the defendant argues the opposite. The plaintiff files their brief first, and then the defendant files within a certain time after that. As the burden of proof is on the plaintiff, they are allowed to file a reply brief after reading the defendant’s main brief, though it is optional. The defendant is not allowed to file a counter-reply: brief submission ends with either the defendant’s main brief or the plaintiff’s reply brief.
The parties may request an oral hearing, which can be in person or by videoconference. This is also optional. If it is requested, the TTAB will arrange for a hearing: a request for a hearing may not be refused. Such a hearing is very like the closing arguments stage of a civil trial – no new evidence or testimony may be introduced, the parties get one last chance to sum up and sell their arguments to the TTAB. In a way it’s also like an appeals court hearing, in that the TTAB “judges” – board members – can and do ask questions much more frequently than a trial judge would be expected to.
After the submission of testimony and briefing, and the oral hearing if any occurs, the TTAB makes a final decision. If they decide for the plaintiff, the trademark registration application is denied. If they decide for the defendant, pending any other oppositions, a registration will issue in the normal course as if the Opposition had never happened. As with a court trial, the losing party has various opportunities to appeal, including asking the TTAB to reconsider or appealing directly to the Court of Appeals for the Federal Circuit, which has review authority over the USPTO. That gets very complicated and very expensive and is very much outside the scope of this post.
Petitions to Cancel / Lawsuits
Once a trademark registration issues, the only way to un-issue it is either to file a lawsuit and ask a court to make the USPTO un-issue it or to file a Petition to Cancel, which is sort of kind of like an Opposition only it happens after the registration issues, it’s more complicated, it’s more expensive, and it’s less likely to succeed. It’s also WAY more outside the scope of this post. I mention them only to make clear that even registered marks are not invulnerable to challenge.
Prior Users vs. Trademark Registrants
Finally, it should be noted in passing, given the subject matter of this post, that prior users of trademarks for similar goods are, in theory, not infringing on the trademark of later users even if the later users have a registration and the prior users do not. However, that is also way beyond the scope of this post and a subject which should be approached with fear, trembling, and an experienced trademark attorney. Maybe two.
I hope you found this post educational or at least entertaining. As always, questions are welcome in the comments or via email or on Twitter. Thanks for reading!
