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Article December 2, 2019

What we can learn from Backcountry.com’s trademark war against small businesses

Online outdoor goods retailer, US-based Backcountry.com, has been facing a social media backlash over the past few weeks, as customers and competitors publicly reacted to its trademark protectionism.

It all started when news broke that the brand had taken action against a huge number of smaller companies that happened to use the term “backcountry” in their names. Public documents revealed that Backcountry.com had been attempting to cancel trademarks against businesses using the term, filing lawsuits against a multitude of smaller companies over the past two years.

Disputed trademarks, product and business names included American Backcountry, Backcountry Babes, Marquette Backcountry Skis, Backcountry Denim Co., Backcountry Nitro, Cripple Creek Backcountry and many more.

The effect of this was devastating for many small businesses. A number of brands halted trading, changed their names or underwent a complete rebrand as a result. The owners and managers of these businesses faced hefty bills for legal representation, and were significantly distressed by the legal battles they found themselves in. Several affected businesses reported feeling “threatened, bullied, and forced into certain results by Backcountry and its legal counsel.”

 

Why this matters

This action is a prime example of the IP threat that small businesses can face all the time. While many business owners may feel that their existing trademarks offer immunity from the threat of legal action, this isn’t always the case. Many of the companies targeted by Backcountry.com did own their own trademarks, but this didn’t stop them being targeted.  

We’re not here to comment on the legal position in this particular case, but the Backcountry.com story clearly demonstrates how small businesses can be at a disadvantage at the threat of IP disputes. Due to a lack of resources and legal advice, in cases like these smaller companies often find themselves with no choice but to cease trading or dramatically change their practices.

IP infringement allegations tend to catch such businesses off-guard, as smaller organisations are often completely unaware that this is a risk they need to prepare for. If a company doesn’t have the resources to defend itself against litigation, the costs of legal advice can quickly mount up, leaving business owners struggling to reach the right decisions.

In the Backcountry.com case, mounting public pressure resulted in a u-turn from the outdoor retailer. Consumers were incensed by the brand’s actions, and even launched a Facebook group calling for a complete boycott of the company. Twitter became swamped with hashtags including #boycottbackcountry, #backcountryboycott and #scrapethegoat, and consumers were quick to share their distaste via the brand’s official social channels.

As a result of the global outcry, Backcountry.com issued a public apology. The company cut ties with its legal partners at IPLA Legal Advisors and started to reach out to businesses affected by litigation to make amends. But what might have happened to the organisations affected by its trademark enforcement if the matter hadn’t caught the attention of the online community? Whether an allegation of infringement is valid or not, it is important for a company to be able to afford professional advise. There is no doubt that sometimes a company has infringed and needs to address it. In other instances it may be right to challenge this position but doing so could require professional advisors, a good legal strategy and the financial position to be able to argue the case if necessary.

Small to medium sized businesses don’t usually have their own legal departments, ready and waiting to advise on IP litigation and trademark cancellation threats. But this doesn’t mean that they’re powerless to protect themselves from these very real risks.

 

IP insurance offers companies cover for the costs and expenses of specialist legal representatives, ready to defend infringement claims and counterclaims. Dedicated IP insurance can also cover damages and settlements, and provides contractual indemnities cover if the claim is made against the insured’s customer.  

If you think your client’s business would benefit from IP insurance, get in touch. Our experienced team aims to quote and bind IP policies within three working days.

Want to learn more about IP insurance? Check out our handy guide to IP insurance for everything you need to know.