The debate over HB 450, a 2009 bill to amend the Utah Trademark Protection Act, is getting even hotter. I just received an email from the Utah Technology Council (UTC) stating that they strongly oppose HB 450. The email encourages members to call their State Senators to vote against the bill and sets forth talking points. Unfortunately, rather than setting forth good substantive arguments regarding the bill’s language, the UTC has offered up misleading information regarding the bill.

The UTC appears to be acting as someone else’s mouthpiece, although it is not clear who is behind the scenes pulling the strings. While I do not have a dog in this fight, I am concerned when an organization purports to be an industry mouthpiece but ends up representing special interests. I do not have any clients paying me to make any statements here and I probably have had clients on both sides of this issue. In any case, here are the primary talking points from the UTC’s email and my response.

– “The bill will deprive Utah consumers of alternative sources of highly valuable information on goods and services that are crucial to making informed purchasing decisions. Under this bill, Utah consumers will not have the same breadth of information to make intelligent purchasing decisions that is available in every other state.”
This is simply false. HB 450 is based in trademark principles and is designed to prevent “confusion” or in other words false information regarding the source of products. This bill is intended to prevent businesses from misappropriating the goodwill of a competitor, e.g., the abusive practice of initial interest confusion which dilutes the strength of a business’s trademark.

– “Existing federal and state trademark and unfair competition laws currently strike a fair and long-established balance between the interests of trademark owners and the interests of the public. Trademark owners already have effective remedies for improper use of their trademarks. By overlaying current law with unusual terms and new restrictions, this bill will cause confusion and increase litigation.”

This is also false. Currently, there is a split in federal courts. Different courts have come down differently on the issue being addressed by HB 450. Consequently, there is no uniform consistent body of law on the issue of initial interest confusion. In fact, technology has outpaced the law and that is why there are currently divided camps on how to address certain trademark issues in an online environment.

– “The only reason offered for such restrictions on access to information is that large search engine companies “unfairly” profit from trademarks of others. We believe this is a “red herring” argument. Such search engine companies are not pirating or in any way misappropriating another’s trademark by representing it to be their own. In most cases, such marks are merely being used to identify legitimate sources of such trademarked goods or alternative goods or services. This is the essence of a free enterprise or free market system. In those rare cases where someone abuses the services of a search engine company by attempting to misappropriate another’s mark by presenting a misperception that the trademarked goods or services originate with another when in fact they do not, the existing trademark law clearly already prevents such conduct.”

Ironically, this talking point itself is a “red herring”. The law is not intended to squelch legitimate competition or free commercial speech. It is intended to prevent competitors from misusing trademarks in search engine advertising. Trademark pirating is more prevalent than the UTC suggests and current trademark law does not provide the same protections intended by HB 450. As pointed out above, federal courts are split over this very issue. Consequently, HB 450 would not be redundant as suggested by the UTC.

– “The bill also has the potential for creating abuses of its own, such as those who may attempt to “stake out” multiple trademarks on the state registration database that is proposed in the bill in order to “co-opt” the already lawfully registered or established trademarks of others in an effort to attempt to force such trademark owners to negotiate to buy back their own marks. For many of these reasons the bill will (and to some extent already has) caused Utah to be perceived as a State that is unfriendly to business and outside interests, similar to the kind of thing that has, on occasion, occurred when nations become overly protectionist and begin engaging in tariff wars.”

This is just a silly argument that has no substance. HB 450 would have no impact on abusive trademark registration practices. To the extent such abuses would be possible, they would be possible under existing law and can be addressed the same under HB 450 as they currently are addressed under existing law. Nothing in HB 450 makes such abuses more likely or more possible.

While I personally have concerns over some of the language used in HB 450 (which I will discuss in a follow-up commentary), I do not believe any of the reasons being argued by the Utah Technology Council are sound. Certainly none of them would be good reasons to oppose HB 450. Interestingly, I spoke with two former Chairs of the Cyberlaw Section of the Utah State Bar this morning who had similar sentiments.

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