Federal Judge Ponders Legitimacy of RE/MAX Trademarks!

Real estate giant, RE/MAX is in jeopardy of losing two of their trademarks as a result of bully tactics that have backfired on them.  I’ll bet they didn’t see that coming!

Many of you have been following the real-life David and Goliath story of RE/MAX attacking me and my company for allegedly infringing on their trademark.  How did I supposedly infringe on their mark?  By using the colors red-over-white-over-blue in my yard sign design.

This saga has been ongoing since 2010, but in case you’re just now hearing about it or you’ve forgotten the details over nearly four years, feel free to check out these previous four articles to bring you up to speed:  Article One | Article Two | Article Three | Article Four  Or if you don’t have the time to read all four previous articles, here’s a brief overview.

Background.  In January 2010, I received a cease and desist letter in the mail from the attorneys at RE/MAX.  It told me that I was in violation of their trademark of red-over-white-over-blue and that I must immediately change all my signs.  I’ll be honest — I was infuriated by their blatant intimidation tactics.  Not a phone call to discuss it, not a shred of evidence presented, but simply a rude and ridiculous demand.

FavoriteAgent.com "mockup" yard sign from BlogMattBlog.com
FavoriteAgent.com “mockup” yard sign from BlogMattBlog.com

What further infuriated me was that I didn’t even have any yard signs at the time. The offending sign was a “mock-up” sign (left) used on my B2B website — it never even existed in real life.  The website in question was my training blog and the audience was real estate agents, so it was not even seen by real estate customers.  Moreover, the company and the agent depicted on the sign were fictional.

But even if it were being used in “real life” in the front yards of listings, our sign is not remotely similar to the RE/MAX sign.  The shades of reds and blues are different, the proportions of each color are different, and our FavoriteAgent.com logo looks nothing like the RE/MAX balloon.

Furthermore, a quick Google image search will show that RE/MAX doesn’t even attempt to enforce a consistent look in it’s own signs.  The shades of red and blue cover the entire spectrum and the proportions of the red-over-white-over-blue vary widely and are not the equal thirds found in the RE/MAX trademark.  Even the placement of the balloon seems to vary widely among RE/MAX signs.

I responded to the RE/MAX letter and told them I was not infringing, and that in order for them to prevail in a trademark violation claim they must first prove “likelihood of confusion” and I invited them to send me some evidence of confusion or likelihood of confusion if, in fact, any existed.  No response.

Four months later I heard back from them with another cease and desist letter claiming it was my  “final” notice and still completely ignoring my earlier request for evidence of confusion or likelihood of confusion.  I responded and said essentially the same thing as before, only this time I added that I was not in love with my sign design and if they wanted to pay me, I would be happy to redesign them.  Again, no response.

It was nearly two years before I received yet a third cease and desist letter and I had frankly assumed the matter was over.  However, during that time, as many of you may remember, I asked my readers to see if they were confused at all by the “similarity” of FavoriteAgent.com and RE/MAX sign designs.  Their responses overwhelmingly showed that there was no confusion.

I again responded that they had presented me with no evidence of confusion or likelihood of confusion, and I renewed my unwillingness to change my sign designs simply because of their threats.  Three demands from RE/MAX and each time I responded immediately asking them to back up their claims of trademark infringement with evidence and each request ignored.

About six months later they referred the matter to an outside law firm who sent me a fourth cease and desist letter and threat of impending litigation.  For the fourth time I responded and told them that I didn’t feel I was in violation of any of their trademarks and I refused to change my signs without first seeing confusion or likelihood of confusion.

The Lawsuit.  Finally, after four threatening letters and my failure to roll over and walk away from my sign design, RE/MAX sued both me and my company for trademark infringement.  I wasn’t really surprised since by now I’d simply learned enough about their use of litigation to force out competing companies and expand their trademarks.

In preparation for my response to the lawsuit I conducted an informal Facebook Survey and had several conversations with other company owners who had similarly been bullied into abandoning perfectly legitimate and not even remotely similar trademarks, and I decided, enough was enough.  Somebody had to stand up, and I decided that somebody would be me.

But I had no intention of spending ten of thousands of dollars in my fight with them, so when I received their boilerplate complaint I began doing research in order to defend the lawsuit pro-se (or without an attorney).  And when I began to research, I made a very interesting discovery.  I discovered that the trademarks RE/MAX was so vigorously trying to enforce were legally incapable of functioning as trademarks.

As it turns out, under Federal Trademark Law the marks in question should never have been issued in the first place.  The Lanham Act 15 U.S.C. §1052(b) provides that any mark that consists of or comprises the flag of any foreign nation cannot be registered as a trademark.  It is non-ambiguous.

No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it … (b) Consists of or comprises the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation, or any simulation thereof.”

The flag of the Netherlands is a tricolor flag of red-over-white-over-blue horizontal bars (depicted below). Variants of the flag have been in use since 1572 and in 1937 the flag was officially formalized as the national flag of the Netherlands. It is the oldest tricolor flag in existence and it far predates the use of the red-over-white-over-blue horizontal bars by RE/MAX.

One is a flag and one is the RE/MAX mark.
No, this is not a trick question.  Design 1 is the RE/MAX mark and design 2 is the flag of the Netherlands. Or was it the other way around? I seem to have forgotten.

RE/MAX’s trademarks (registration numbers 1,702,048 and 1,691,854) are both marks that “consists of or comprises the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation, or any simulation thereof”, specifically, the flag of the Netherlands, and under the statute “shall be refused registration on the principal register on account of its nature”.

In other words, RE/MAX’s use of red-over-white-over-blue horizontal bars on real estate yard signs is legally incapable of functioning as a trademark and was therefore wrongfully issued.  Can red-over-white-over-blue horizontal bars be used by RE/MAX?  Sure. Can it be legally trademarked?  No.  And yet it was registered.  But how could a trademark that is blatantly in violation of the statute be allowed?

One possibility is the sequence of the submissions.  You have to wonder whether the simple flag design (registration number 1,702,048) would have ever been approved had it not been first approved with the famous RE/MAX balloon obscuring much of the flag  (registration number 1,691,854).

Some might find it curious that the obscured version was submitted first and approved and only then the unobscured flag design, when the flag design clearly had to preexist the balloon overlay version.  While all the details of the actual submission have not yet been revealed in discovery, the order of registration does seem odd at best.

But how could the flag design be registered in the first place?  The US Patent and Trademark Office is a bureaucracy and people often make mistakes.  It’s human nature.  But the law anticipated trademarks being issued in error from time to time and provided the mechanisms with which to cancel them, both administratively and judicially.  Lanham Act 15 U.S.C. §1119 states the following:

“In any action involving a registered mark the court may determine the right to registration, order the cancellation of registrations, in whole or in part, restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action. Decrees and orders shall be the court to the Director, who shall make appropriate entry upon the records of the Patent and Trademark Office, and shall be controlled thereby.”

And that very issue is before the court right now: We have asked the judge to judicially cancel RE/MAX’s trademarks (registration numbers 1,702,048 and 1,691,854) as part of our counterclaim. RE/MAX attempted and failed to have the court take judicial notice of the incontestability of those marks and also filed a motion dismiss our counterclaim seeking a judicial cancellation of the two trademarks and failed there as well.

In other words, the viability of those two trademarks is now very much in play and RE/MAX stands to lose their red-over-white-over-blue trademarks.  Wouldn’t it be funny if a little boy with his slingshot managed to slay another giant!

Finally, I’d love to hear from you, my readers.  I am currently trying to put together a list of others who have been similarly bullied by RE/MAX, so if either you or someone you know has also been a victim, please have them contact me.  I intend to prove their pattern of intimidation and would like as many different examples as I can find.  Please weigh in with your thoughts in a comment below.  I’d love to hear what you have to say.

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