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Monday, December 19, 2005

Trademark issues grow more common
Montana companies find legal woes as they spread beyond
state's borders
BY Robert Struckman

It's been about five years since the copyright and trademark infringement case between a Missoula company and Timex Corp. was first filed.

During that time, the case has bumped across the judicial landscape from Missoula County District Court to the 9th U.S. Circuit Court of Appeals in San Francisco and back.

This summer, the case was again appealed to the 9th Circuit. Robert Lukes, attorney for Polar Bear Productions Inc., hopes for a decision sometime in 2007.

Then the case may, for a third time, be heard in a Missoula courtroom.

“We will potentially go to trial on trademark and punitive damages,” said Lukes, of the Garlington, Lohn and Robinson law firm.

Not that the case would then be closed - any decision likely would be appealed. Never mind Timex has twice been found guilty of using Polar Bear footage without paying for it.

Intellectual property issues are on the rise in Montana, say business and legal experts. Once rare, cease-and-desist letters relating to trademark infringement have become commonplace, several Montana attorneys said.

But trademark and patent litigation has not increased. In fact, those federal case counts in Montana have trended down slightly in recent years. From 1996 to 2000, 38 cases were filed in federal court in Montana. Since then, 31 new cases have been filed. All that time, the filings accounted for only about

1 percent of the federal civil case load.

Polar Bear v. Timex offers a textbook explanation: Even simple trademark and patent litigation takes years and racks up impressive legal fees.

Nevertheless, disputes and lower key run-ins are increasingly common for several reasons.

More Montana companies are applying for federal trademarks. Also, Montana companies aided by the Internet have pushed beyond the state's boundaries.

That increases the potential for conflict with regional, national and international companies, said Toni Tease, a Billings-based intellectual property attorney. Tease teaches continuing education classes for lawyers on intellectual property issues.

Andy Sponseller, a co-owner of Rattlesnake Winery, would have saved tens of thousands of dollars if he had checked the federal registry of trademarks before starting his business. He would have found that Portteus Winery in Zillah, Wash., had trademarked the name about 10 years earlier.

“We just didn't think of it. We live in the Rattlesnake. We walk to the creek every day,” Sponseller said.

After receiving a cease-and-desist letter, Sponseller consulted a lawyer. His case was shaky, he said.

Now, he's looking for a new name for the winery.

The increasingly sophisticated investment scene in Montana also has played a role, Tease and others said.

More companies know about the benefits of a well-rounded intellectual property portfolio. And the increasingly sophisticated nature of investment in Montana means that more investors are talking with more companies about patents, trademarks and copyrights.

To top it off, Montana companies have become more assertive about protecting their own trademark rights, Tease said.

“Remember, Montana companies are not just on the defensive. They are also on the offensive,” Tease wrote in an e-mail.

Trademarks are meant to avoid confusion between the products or services of one party and those of others, said Lukes, who also teaches trademark law at the University of Montana School of Law.

The Law School first started offering the course about five years ago.

UM's School of Business Administration offers no classes on trademark, patent or copyright issues.

“Historically, it has not been as important for lawyers in this state to be as sophisticated (on intellectual property issues) because, frankly, it didn't come up that often,” Lukes said.

But that day has passed, he said.

Trademark issues may generally be settled before a lawsuit is filed, but lawyers in Montana need to be able to advise a business client who receives or contemplates sending a demand letter, Lukes said.

“The bottom line is, before you spend $10,000 or $100,000 on marketing, register your brand. It's cost-effective,” Tease said.

Not that Robbe Lindsay, a co-owner of Polar Bear Productions, would do anything different in retrospect. The company itself has been hibernating, Lindsay said, while the fight against Timex continues.

“What else do you do? We made an effort to stand up for the little guy, and we'll continue,” Lindsay said.

He has started a new company, Bear Grass Productions, and has some new and interesting projects in the works.

“I'm lucky to be able to get back to what I love,” Lindsay said.

Reporter Robert Struckman can be reached at 523-5262 or at rstruckman@missoulian.com.

©2005 Missoulian a division of Lee Enterprises

Reprinted with permission.