Brand Bully

The terms brand bully and trademark bully refer to large corporations that use legal intimidation techniques to harass and threaten smaller companies when they perceive that smaller companies are trying to infringe on their trademark, such as with a similar product name or branding element. Often, brand bullies threaten litigation through cease-and-desist (C&D) letters, hoping that the smaller organization(s)—with fewer resources to enter into an expensive, drawn-out legal battle—will be cowed into discontinuing use of the trademark in question. Often, these large corporations argue that they are simply protecting important trademarks and brand elements, but the public typically views the larger corporation as a bully, unfairly wielding its power on a much smaller organization that is not a realistic threat. One of the additional challenges facing smaller organizations is that these cases are frequently not reported by the media. Lack of media coverage can benefit the brand bully, which does not want to bring public attention to its intimidating legal actions. Some traditionally cited examples of brand bullies include McDonald’s, Starbucks, and Disney. This entry discusses the legal decisions and laws related to brand bullying, the relationship of brand bullying to corporate shaming, and alternative ways in which the term brand bully is used.

Legal Precedent

Certainly, there is a distinction between bullying nonthreatening, smaller businesses and legitimately defending a major corporation’s trademark. The outcome of one lawsuit, Moseley v. V. Secret Catalogue Inc., has provided some guidance regarding this distinction, though the result may encourage bullying. Essentially, Victoria’s Secret asked the owners of a lingerie store, Victor’s Secret, in Kentucky to change its name. In response, the owner changed the name to Victor’s Little Secret, which prompted a trademark infringement lawsuit by Victoria’s Secret. The case went to the Supreme Court, and the outcome resulted in a victory for Victor’s Little Secret on the basis that Victoria’s Secret could provide no tangible proof that its sales or reputation had suffered. In response to the decision, however, the U.S. Congress passed the 2006 Federal Trademark Dilution Revision Act, which removed the requirement for corporations to prove actual economic loss or injury. Ultimately, by revisiting the case and applying the new law at the district level, the decision was reversed, and the court found in favor of Victoria’s Secret.

Despite the challenges raised by the Federal Trademark Dilution Revision Act, smaller companies did receive some help with the passage of the 2010 Trademark Technical and Conforming Amendment Act. The act amended the 1946 Lanham Act, which is the United States’ primary federal trademark law protecting companies from trademark infringement and dilution as well as false advertising. Included in the 2010 amendment was the commissioning of a study by the U.S. Patent and Trademark Office to investigate the extent to which small businesses are and have been targeted through the use of legal tactics by large corporations when those tactics are being used for intimidation rather than for legitimate defense of trademark infringement. Some of their questions included the extent to which corporations are using C&D letters as well as public perception regarding the extent to which the federal government should take action to prevent brand bullying.

One example in which a major company was perceived by some to overstep its trademark reach was the popular Candy Crush Saga game. In early 2013, King.com—the makers of Candy Crush—applied for a trademark for the word candy. In early 2014, following public outcry regarding the ability of a company to own the trademark for a word as common as candy, King withdrew its application.

Brand Bullying Versus Corporate Shaming

Given the ambiguous legal protection and few resources for major legal battles with large corporations, some smaller businesses that have been the target of brand bullying have engaged in public corporate shaming. In the corporate context, shaming involves publicly ridiculing a business for legal or ethical wrongdoing: shining a light on a company’s practices that are perceived to not be in line with community expectations and/or norms. Social media, for example, provide smaller businesses an inexpensive way to expose brand bullies and shame them into retracting litigation threats. Moreover, many corporate watchdog websites have been created to keep a check on corporate practices and to let the public know which companies to support or not support. Indeed, shaming often is the only viable option for small businesses being targeted by major corporations. For example, in one notable case, Hansen Beverages—the maker of Monster energy drink—sent a C&D letter to a small Vermont brewery to stop making a seasonal October beer called the Vermonster. Although the trademark laws favored the brewery, the brewery’s owners were told that fighting the court battle would probably bankrupt them. The brewery therefore began publicly shaming Monster, which included asking local businesses throughout Vermont to remove Monster products. Following the public outcry, Hansen withdrew its C&D letter and all legal efforts to stop the brewery.

Alternate Definitions

The term brand bully, while typically associated with corporate legal intimidation, has been used in other ways. For example, some parents refer to “brand bullying” to explain peer pressure on their children to own the “right” brands for fear of being bullied or teased by their peers. In these cases, corporations aware of their products’ popularity might develop marketing strategies—such as back-to-school advertising campaigns—that capitalize on peer pressure and influence a guardian’s buying choices accordingly. Finally, the term brand bully has been used when major corporations find ways to have a brand presence at events for which they are not a sponsor. In these cases, they are seen as pursuing the same benefit as paid sponsors in terms of brand exposure, but without having to invest in the event itself. Often, this form of perceived bullying occurs when one major brand is trying to gain exposure during an event for which a chief rival is the official sponsor. For example, in 2014, the Major League Soccer All Star Game took place in Portland, Oregon. Adidas was the official sponsor for Major League Soccer uniforms and the All Star Game, but Portland is in Nike’s backyard. Nike therefore inserted itself by hosting a street ball tournament on a barge floating downtown in Willamette River. It did not infringe on Adidas’s sponsorship, but the Nike logo was visible that weekend directly across from the main festivities. In 2015, Beats By Dre—a subsidiary of Apple and owner of the popular Beats line of earphones—was accused of undercutting Bose’s official sponsorship of the National Football League draft. The company equipped top picks in the draft with Beats products and the morning of the draft released a commercial starring Marcus Mariota, Heisman Trophy winner and one of the top two picks in the draft.