Attorneys at Law PO Box 100637 * NJ DC Bar ®

Erik M. Pelton* Arlington, VA 22210 ** VA Bar

Mark L. Donahey** T: 703.525.8009 *** VA DC & NY Bar
Benjamin D. Pelton*** F: 703.997.5349 erikpelton.com
of counsel

April 23, 2010

Comments for AIPLA re: Administration Strategy Paper on IP Enforcement

Thank you for soliciting input regarding the AIPLA’s response to the Intellectual Property
Enforcement Coordinator’s request for comment for the Joint Strategic Plan.

An IP enforcement strategy must balance the rights of legitimately infringed business owners
against the interests of business owners who are wrongly accused of infringement. Just as
infringement of intellectual property rights create costs for the economy; so too does
overreaching enforcement efforts. These costs force many small businesses to spend valuable
time and resources to defend unnecessary enforcements and often cause abandonment of
valuable IP rights and restrictions of innovation.

Our firm encourages the AIPLA to take this opportunity to emphasize the importance of ensuring
that the intellectual property rights of small businesses and entrepreneurs are not subdued by the
government’s IP enforcement strategy. While it is essential to respect and enforce intellectual
property rights, excessive measures to prevent infringement and abuse of the system often stifle
innovation and competition by imposing significant burdens on legitimate small businesses and
entrepreneurs. Therefore, the Joint Strategic Plan must fairly balance the interests of legitimately
infringed rights holders against the costs imposed on those who are wrongly accused of
infringement.

We propose that the Joint Strategic Plan mitigate the conflict between these objectives by (i)
improving IP literacy among entrepreneurs, (ii) increasing access to information about the
enforcement process for small businesses, and (iii) avoiding new incentives driving excessive
enforcement of IP rights.

IP Literacy: Providing clear educational resources about intellectual property rights tailored to
entrepreneurs and small businesses is perhaps the most efficient way to reduce the costs of IP
enforcement for all parties. Much inadvertent infringement could be prevented by educating
entrepreneurs about the range of intellectual property rights, ways to know whether an activity
may be infringing others’ rights, and the importance of considering intellectual property issues
every time they start a new business. As an added benefit, small businesses will be more likely
to avail themselves of intellectual property protections early so they are better positioned to
benefit from their innovations in the marketplace.

Improved Access: The opacity of IP enforcement procedures before government agencies

induces small businesses and entrepreneurs to unnecessarily yield their valid IP rights when
challenged by more sophisticated parties. For example, those without a trademark attorney on
call will be more likely to let a notice of opposition or cancellation from the Trademark Trial and
Appeal Board go unchallenged simply because their rights and the process for preserving them
are not clearly presented by the government in laymen’s terms. In addition, small businesses
that do attempt to fight such challenges are disproportionately harmed by delay, uncertainty, and
costs imposed throughout the proceedings. To level the playing field, the government must
clarify and simplify the enforcement process and reduce the time and cost of proceedings.

Avoid Incentives for Over-enforcement: Several policies tend to encourage rights holders to
aggressively pursue enforcement actions against activities that are not likely to result in
infringement. For example, trademark law favors mark holders that can show a track record of
successful enforcement against others, resulting in enforcement for enforcement’s sake instead of
a true assessment of the actual likelihood of confusion that may result from permitting the use.
Small businesses and entrepreneurs would benefit from the availability of a remedy against
rights holders exhibiting a pattern of bad-faith enforcement, even if it were rarely used. At
minimum, policy makers need to take into account the hidden costs of over-enforcement,
particularly as it affects small businesses.

The study of “the extent to which small businesses may be harmed by litigation tactics by
corporations attempting to enforce trademark rights beyond a reasonable interpretation of the
scope of the rights granted to the trademark owner” recently mandated by the Trademark
Technical and Conforming Act of 2010 is a step in the right direction. We encourage AIPLA’s
active participation with the commission to be formed, and urge that particular attention be paid
to the needs of small businesses and the ramifications of over-enforcement of trademark rights.

In conclusion, the Joint Strategic Plan can best reduce the costs of IP enforcement for all parties
by improving IP literacy and access for small businesses and avoiding incentivizing excessive
enforcement of IP rights.

Erik M. Pelton Mark L. Donahey

On behalf of:
ERIK M. PELTON & ASSOCIATES, PLLC