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Grange Trademark protection efforts show progress, results

By Leroy Watson, National Grange Special Director for Trademark Protection and Brand Management, The New Grange (May/June 2011)

  JUNE 14, 2011 --

Since November 2010, the National Grange Trademark Protection and Brand Management program has shown significant progress and results. 

Financially, we are still spending more on trademark protection than we expected, but the trends are in the right direction. 

We also face new challenges regarding a recent federal court decision that will require us to amend our license agreements but will eventually allow us to become a stronger partner with our entrepreneur licensees and enhance our GRANGE trademark.

Overall, the total number of cases concluded or closed since the Tysons Foods case is 41. The number of open cases is now 15, the fewest active cases in the past four years. 

Given the status of our active cases and the recent slowdown in new infringement cases, we can cautiously predict that the number of active cases could fall to ten or fewer by 2012. 

In addition, the total number of entrepreneurs who have licensees, joint marketing agreements, and letters of assurance to use the trademark GRANGE in their businesses, as well as the number of prior affiliated Grange legacy companies that continue to responsibly use GRANGE trademarks, are at all-time highs. 

Beyond our efforts to defend our trademarks, we have also been strengthening our legal rights by registering our trademarks and logos in important sub-categories of commerce that are important to the fundraising and commercial activities of our Grange chapters. 

By obtaining sub-registrations, in addition to our general trademark registrations, we put the public on notice of the diverse range of commercial activities, member 

services, community services and charitable/philanthropic programs that are the core of the Grange’s mission. 

Our existing sub-registrations for our trademarks include: restaurant services, retail arts and crafts marketing services, philanthropic and charitable services, legislative newsletter services, member programming and educational material related to affinity credit cards, and promotional posters, publications, newsletters, brochures, pamphlets regarding traditional Grange community service programs, contests and activities. 

We are pursuing additional sub-registrations and we hope to have additional trademark sub-registrations by this year’s National Convention.

Financially, while our inventory of active cases is at a low, the composition of those cases has been challenging. 

Because we did not seriously begin our trademark protection activities until four years ago, a number of businesses and products marketed under the trade name GRANGE did not come to our attention for trademark enforcement until after those businesses and products had been on the market for several prior years. 

We also have several active cases where a business owner did not realize that foreign language derivations of a US trademark are equally protected by law as the English language trademark. This mostly affects the term GRANJA in a business or product name. 

Most of these entrepreneurs made innocent mistakes selecting the name GRANGE or GRANJA as part of their business name, product or services and believe that they have valuable, proprietary public goodwill associated with their names. 

They contend that their use of the term GRANGE or GRANJA does not conflict with the mission of the Grange or its programs. We have tried to be sensitive, approaching these cases in a proactive manner and pursuing private negotiation rather than lawsuits to resolve these disputes. 

However, even when there is no willful intent to infringe on our trademarks, we are still obligated under U.S. Trademark law to defend our trademarks. 

Most of these infringement cases have been resolved using innovative legal agreements such as licenses, joint marketing agreements and letters of assurance. 

However a minority of these entrepreneurs insist on utilizing their legal rights to delay reaching a final agreement that acknowledges that the National Grange has held uncontestable rights to the name GRANGE since 1876. 

Legal negotiations to reach mutually acceptable agreements can be more time consuming and more expensive for us than filing a lawsuit. 

However, your National Grange is committed to treating these entrepreneurs fairly as we work to resolve these unintended conflicts.

The newest challenge we face in our trademark program is not from giant corporations looking to take away our trademark registration or even from entrepreneurs looking to avoid their responsibilities to negotiate in good faith. 

Instead our newest challenge arises from a federal appeals court decision

In Freecyclesunnvale v. The Freecycle Network, 626 F.3d 509 (9th Cir. 2010), a Federal appeals court ruled that failure to implement a trademark quality control program by the licensor can result in the loss of trademark protections. 

This means that when the National Grange grants licenses to use Grange trademarks, we must monitor the quality of goods and services those licensees sell. 

The court ruled that a licensor who fails to include the right to monitor quality in a license, or fails to monitor the quality of the licensee’s goods and services, has engaged in “naked licensing” and may lose its right to enforce its licensed trademarks, even against other parties who are not part of the license. 

From now on, licensors, such as the National Grange cannot rely on the licensee’s own quality controls to assure that the terms of the license are being met. 

We have started amending our license agreements to give us the right to monitor the quality of our licensees’ products or services. 

We are, naturally, concerned about taking on responsibilities that we are not qualified to administer. 

We have focused on establishing license relationships with honest, intelligent and reputable entrepreneurs who understand their business plans and the markets for their products better than we do. 

We have deliberately avoided license relationships where the National Grange would be a partial owner or equity partner in the business, thus having a direct say in managing the business. 

We avoid this because the National Grange’s core business is membership. 

Our core products are rights, privileges, knowledge and benefits that are directly and uniquely associated with Grange membership. 

Our key programs, activities and financial resources are geared to support our core business and core products. 

Our trademark assets exist primarily to promote our core business and support our core products. 

We feared that this court ordered licensor responsibility to exercise quality control over licensees’ businesses would detract from our responsibilities to our members and add unnecessary burdens to licensees.

However, after reviewing these new responsibilities with a more open, creative mind, we believe that we can exercise these responsibilities in a manner that supports our core mission and does not impose a burden on our licensees. 

As part of the process of monitoring the quality of the businesses we license, we soon hope to take that information and use our communications programs to feature success stories and valuable information about our licensee partners to our members, other licensees and legacy companies, and the general public. 

Our hope is that this approach will not only comply with the directives of the federal court but will allow our licensees and the National Grange to devise mutually beneficial strategies to increase the value of our trademarks. 

As additional entrepreneurs see the National Grange has a valuable business partner, we should attract stronger and more dynamic business licensees.

Therefore, as summer approaches, your National Grange Trademark Protection and Brand Management Program is looking to take the lemons handed to us by the federal court and turn them into the lemonade of enhanced public relations for our Grange and our licensees.


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