Correcting for COVID-Caused Disruptions of Litigation-as-Usual: V-ENE Simplifies, Quickens, and Cost-Contains Trademark and Trade Dress Cases

| Sep 18, 2020 | Trademarks |

How Has the Legal Landscape Regarding Trademarks Changed Lately?

From “Then” to “Now”; First, “Then”

As you already know, modern TM/TD litigation can rock your budgetary-boat. As you also know, such litigation has become more contentious, more detailed, more lengthy, and thus more expensive. Recently expanded measures of recoverable costs (e.g., lawyers’ fees and threatened monetary awards), plus investigatory charges, expert witness retainers and fees, don’t even start to account for the lost time and energy of key executives diverted from business to litigation meetings and preparation for and attendance at, depositions and courtroom appearances. Also bot accounted for: possible negative publicity and disgruntled investors!

Even a fairly routine trademark case that isn’t resolved by cease-and-desist correspondence and conversations can morph into an unwieldy lawsuit that costs many, many thousands of dollars–especially with the complexities of modern e-discovery, the need for expert testimony, and controversies about survey evidence. And that’s just for the preliminary injunction phase! More complex and/or “big” cases easily can run into the millions of dollars. Beyond that, some very valuable company assets – trademarks representing large reservoirs of good will – often are endangered by trademark litigation.

Now, “Now”-In the Covid-19 ERA

  • Courts across the country are shutting down and/or slowing down to “stay safe”
  • A few court systems are considering increased reliance upon non lawyers to handle certain legal matters
  • The USPTO has extended various due dates multiple times;
  • Companies are finding their businesses stifled and their cash flows and profits reduced, and many are focusing on protecting their employees in the short run and maximizing their businesses’ long-term outlooks.

Meanwhile, various TM/TD issues continue normally, but others actually are on the rise. Infringements of many types-some of which deserve immediate judicial action (such as counterfeiting) – abound. Other issues (such as disputes involving suppliers, licensees, or contracting parties, and others involving very aggressive competitors) may call for urgent judicial attention, but such attention may not be forthcoming due to court delays, etc. And, ENE can be effectively conducted “virtually” (thus, “V-ENE”)-which saves time and money safely.

What Exactly is ENE (Early Neutral Evaluation) and How Does it Affect Litigation?

Alternative Dispute Resolution [“ADR”] is an umbrella term for techniques/processes other than the typical negotiation and litigation approaches. Whereas negotiation involves two “sides,” ADR always adds a neutral non-combatant to the mix – thus substantially changing the dynamics of dispute resolution. ADR comes in many varieties, some being pure and some being blended: arbitration (private judging, binding or non-binding); mediation (mostly facilitative); and mini-trials, summary jury trials, and early neutral evaluation (evaluative) [“ENE”]. ENE is

Early: aims to nip the dispute in the bud, before great “investment”

Neutral: is conducted by a subject-savvy professional with no stake (either substantive or procedural) in the controversy

Evaluation: proffers an honest and knowledgeable appraisal, a “reality check”

N.B. Adding “V” for Virtual adds to ENE’s appeal greatly: getting the job done without having to travel to a meeting place, and being able to communicate safely, yet effectively, is a real plus.

What are the Benefits of ENE In TM/TD Cases?

ENE can be an effective evaluative technique in various TM/TD disputes. ENE allows an unbiased third party, a person deeply steeped in the legal subject matter and accustomed to considering all sides, to help both sides – or, in ex parte situations, the sole retaining party – to understand the strengths/weaknesses of their positions before large litigation expenses are incurred. Indeed, ENE can be commenced very early on in a dispute, based on existing allegations and information, thus possibly avoiding substantial “discovery” expenditures. As a knowledgeable, unbiased neutral, the ENE professional can see the problem from perspectives different from those of the disputing parties and she/he can identify dimensions and possible solutions which may not be apparent to them.

Because ENE proceedings are voluntary and non-binding, and because they are private, confidential, and intended to be inadmissible in court – all matters confirmed in express pre-ENE agreements – they can be tailored to meet the special needs of each situation. This flexibility is in stark contrast to the rigid procedures of court cases and U.S.P.T.O. Trademark Trial and Appeal Board proceedings. Moreover, ENE proceedings often can reduce the time and costs associated with litigation by narrowing or eliminating issues. The speed and informality of ENE are other benefits of this type of ADR. And V-ENE increases convenience and assures safety.

How Might ENE Simplify/Clarify/Shorten TM/TD Cases?

When deciding if ENE is right for a specific conflict, consider these benefits:

  • ENE can be scheduled early in a dispute, thus identifying critical issues in a much shorter timeframe and minimizing litigation-related charges and administrative costs
  • Early issue identification can reduce the time executives and key employees are kept away from business matters
  • ENE illuminates the strengths/weaknesses of a case, so the parties can negotiate with full knowledge of their absolute and relative positions
  • ENE is especially appropriate:
    • in complicated, unusual cases
    • where there’s great need for quick and private resolution
    • where expert witnesses’ opinions may need to be evaluated
  • As compared to some litigation counsel engagements, the scope of ENE professional engagements is easier to define and to control, thus increasing the likelihood of achieving cost-effective solutions

How Does ENE Coordinate with Other Types of Alternative Dispute Resolution?

  • The understanding generated by the ENE process may empower and encourage the parties to seek settlement through mediation:
  • Many risks of adjudication (judicial or arbitral) can be avoided by mediation
  • The ENE professional can hand the dispute off to a mediator, who will switch the process from evaluation to facilitation, increasing the likelihood of settlement
  • But note: Mediation may be less amenable to a “virtual” format than ENE, as the former entails more personal interactions
  • Also note that starting with ENE rather than mediation may avoid the natural feeling of pressure to settle that often accompanies mediation

Adapted from materials developed for national webinars conducted by the author for AIPLA (American Intellectual Property Law Ass’n; Aug. 13, 2020) and PLI (Practicing Law Institute; Sept. 15, 2020). Copyright © 2020 by K. B. Germain


Ken Germain has more than 45 years of varied experience in the trademark/unfair competition field and is a former full-time law professor. He focuses his practice on trademark counseling, consulting and litigation, including Early Neutral Evaluation. Ken is often retained as an expert witness on issues relating to trademarks and unfair competition, working on cases involving some of the nation’s largest companies in high-stakes, cutting-edge cases. He has testified in court over 15 times. Ken is an active speaker on trademark and unfair competition. He can be reached at [email protected] or 888-564-4421.