William Mitchell students craft bill to protect Minnesota’s small-business owners

A bill written by students at William Mitchell College of Law that would significantly lower legal costs for small businesses involved in trademark disputes with large corporations has been introduced in the Minnesota House and Senate.

Mitchell student and State Rep. Joyce Peppin, R-Rogers, today (Thursday, April 5, 2012) introduced House File 2996, the Small Business Trademark Protection Act, which seeks to provide an alternative settlement process in trademark disputes between companies who attempt to assert their trademark rights beyond a reasonable interpretation of those rights.  This conduct is called “trademark bullying” by the US Patent and Trademark Office.

Currently, small businesses have little ability to fight an expensive legal battle if a large and well-known corporation demands that a smaller company stop using a trademarkDue to the perceived excessive cost of waging a legal battle, small business owners usually stop using their trademarks, even if they have been marketing their company trademark for years. The financial impact can be devastating to a small-business owner trying to build market share.

The bill, along with its companion in the Senate (Senate File 2598), which was authored by Sen. Geoff Michel, would allow small businesses to bring a legal action to a state settlement court, the Office of Administrative Hearings, at a much lower cost. If the larger company refuses to participate in the settlement conference, an administrative law judge could issue an order recommending the Secretary of State revoke that company’s license to do business in Minnesota.

“There are already so many obstacles and costs  associated with starting a small business and making it profitable,” said Rep. Peppin. “Leveling the playing field so that small businesses can defend themselves in frivolous and expensive trademark disputes is one thing we can do to help small businesses thrive in Minnesota.”

Professor Kenneth Port, director of William Mitchell’s Intellectual Property Institute, has analyzed all 2,700 trademark cases since the inception of the Lanham Act, the primary federal trademark statute in the United States. He found that only 1.5 percent of all trademark cases filed reach a trial on their merits, largely because small companies can’t afford to fight the case in a court of law.

“Trademark bullying is happening in the United States and it is suppressing development,” said Professor Port. “This legislation could address that inequity.”

William Mitchell’s intellectual property law program features an extensive, broad-based curriculum focused on patent, trademark, and copyright law. Assisting in the drafting of  House File 2996 is just one of the ways that William Mitchell offers practical, real-world educational opportunities. Other students that helped in this continuing effort to bring balance to the American trademark system included Jessica Alm, David Matzen and Mitch Billings.