As a business litigation attorney in Minnesota, I commonly tell clients that just because you can sue someone, doesn't mean you should. If you bring a business lawsuit, make sure the optics are in your favor.
This article looks at the “Cancel Culture”, the Backcountry.com boycott, and suggestions for avoiding PR disasters in the context of business litigation. My conclusion is that attorneys and their business clients have to consider the optics of their actions and, if necessary, counter any boycotting with their own PR efforts.
“Cancel Culture” is a modern term for public shaming, boycotting, or “cancelling” someone on social media for a controversial statement or action. Often, there are controversies surrounding whether a particular statement or practice is politically correct in the modern era.
There are numerous examples of celebrities being “cancelled” after allegations of sexual harassment or violating other social norms. People include Kevin Spacy, R. Kelly, Roseanne Barr, professional athletes, and politicians such as Al Franken. Social media allows people to "share" their thoughts and start their own campaigns. These views and campaigns can spread like wildfire on social media, the internet, and traditional media. Pressure is often placed on advertisers affiliated with the celebrity or other person.
Whether the public shaming has a reasonable basis or not, it affects the future of a person or business. For a business, a boycott can mean the loss of clients, customers, profit, reputation, and even the viability of the business.
The Backcountry.com Boycott
If you are a retail company, don't start off the Christmas season with an apology letter from your CEO. The Backcountry.com CEO was recently forced to do this after a 19,000+ person boycott on Facebook and customer backlash.
Backcountry.com sells outdoor gear. It has been around since the 1990's. It registered trademarks in the early 2000's for “backcountry” and similar names. Over the past year, Backcountry.com and its attorneys have sent cease-and-desist letters to many companies that also use the term “backcountry”. Apparently, most companies complied and removed “backcountry” from their business names and branding. Backcountry.com also filed around 50 petitions to cancel any trademarks related to “backcountry.”
Marquette Backcountry Ski Litigation
A small company in Michigan called Marquette Backcountry Ski, which makes snowshoe-skis, chose to defend its name and brand. Backcountry.com then sued Marquette Backcountry Ski in federal court in California. Here is the lawsuit:
Backcountry.com alleged trademark infringement and unfair competition claims. It asked for profits that Marquette allegedly gained by infringing on Backcountry.com's trademark. Not only some profits, Backcountry.com asked for three times the profits that Marquette got from using “backcountry”. This would be allowed under 15 U.S.C. § 1117(a). A judgment of this amount could shut down Marquette Backcountry Ski.
It is important to note that Backcountry.com appears to have had legitimate claims and a reasonable basis for taking legal actions. It is very common for people and businesses to bring trademark and unfair competition claims. This type of civil litigation happens daily across the U.S. and other countries.
What went wrong?
The backlash and boycott came from the way in which Backcountry.com took legal action. People saw Backcountry.com as bullying small companies that only coincidentally had “backcountry” in their branding. They were not necessarily direct competitors. Backcountry.com's hard-hitting tactics and aggressive lawsuit against small companies angered outdoor enthusiasts.
Simply put, Backcountry.com's failure to integrate a legal strategy into their overall business strategy was a costly mistake.
Know Your Customers
Backcountry.com and its lawyers failed to consider the values of its customers. If customers do not see a company's values as being consistent with their own, they will buy from another company whose values are more closely aligned.
Outdoors enthusiasts often view the outdoors as shared, whether it be trails, campsites, etc. This is a primary value of Backcountry.com's customers. These customers expected the company to treat the word “backcountry” like the outdoors, and to share the word “backcountry” for commercial purposes. Backcountry.com didn't create the “backcountry” or invent the word. Like many outdoor retailers, it used “backcountry” as part of its sales pitch to outdoor enthusiasts.
Yet, Backcountry.com's recent legal actions were seen as claiming ownership of the “backcountry”. While its registered trademarks give them legal rights over “backcountry”, this was at odds with customer values.
In sum, Backcountry.com took legal action without considering their customers.
In civil litigation, the client is the decision-maker and decides how to use a lawyer's services. For a client to get value from legal services, he or she must consider practical issues such as business reputation. A lawyer should ask about business objectives, but the client should also communicate the objectives to the lawyer.
Backcountry.com ignored the practical effects of its legal actions.
What practical benefit would Backcountry.com get from suing small companies that posed little or no competition? Backcountry.com has a more dominant position in the retail gear marketplace. Outdoor enthusiasts probably won't mistake it with Backcountry Babes Ski Adventures or Marquette Backcountry Ski. For most of its legal opponents, Backcountry.com's legal actions had somewhat little to gain but risked damage to its reputation.
The Buck Stops Where?
Whose blunder was it? The Backcountry.com CEO certainly took the blame for the aggressive legal strategy. But the lawyer obviously moved the strategy forward and advised of the legal options.
What responsibility did the lawyer have to warn Backcountry.com of the blowback? When I handle civil litigation, especially business disputes, I talk with clients about the importance of their long-term interests. Certainly, the lawyer has a moral, if not an ethical duty, to consider the company's larger interests and mission.
If the litigation strategy does not fit into the company's overall business strategy, then one of those strategies must yield. Usually, it must be the legal strategy that yields. In Backcountry.com's case, it should have modified its legal strategy to consider customers' values. Also, some PR action or creative negotiation with Marquette Backcountry Ski could have helped.
Backcountry.com's Attempt to Make Things Right
In response to the backlash and boycott, Backcountry.com's CEO yielded to the pressure. Here are some steps he took:
- Dropped the lawsuit against Marquette Backcountry Ski;
- Partnered with Marquette to help grow Marquette's business;
- Donated money to nonprofits affiliated with Marquette Backcountry Ski;
- Hired Marquette's CEO as a consultant to innovate at Backcountry.com;
- Fired the large law firm that took legal actions;
- “Benched” the in-house attorneys at Backcountry.com; and
- Offered a public apology for his company's actions.
Notably, Backcountry.com has not yet withdrawn about 50 petitions it had filed with the U.S. Trademark Office to cancel dozens of other trademarks that contain “backcountry.”
However, as a whole, Backcountry.com's actions show a commitment to change. The damage has already been done and it is unclear how long and how much financial damage the company will suffer. Its PR actions certainly cannot hurt its future reputation with customers.
Similarity to Cancer Litigation
The issues with Backcountry.com remind me of similar issues faced by the Susan G. Komen Foundation.
Some years ago, The Susan G Komen Foundation made the same mistake when it tried to enforce the trademark phrases “for the cure” or “for a cure". Other cancer charities used this phrasing to raise money and awareness of cancer issues.
The Susan G Komen Foundation wanted to protect its donation stream and warned other cancer charities to stop using the phrases. Apparently, it has taken legal action against 40+ charities for use of the phrase “the cure”.
People were appalled by the aggressive legal action and the Komen Foundation lost donors. Donors expected the Komen Foundation to be collaborative and collegial with other cancer charities. It is still a major player in the cancer charity space, but it has angered many supporters by using donations to fund legal actions against other cancer charities.
Arguably, the Komen Foundation failed to integrate its legal actions into its organizational mission, just like Backcountry.com.
Integrating Litigation and Business Strategies
Here is a good scholarly article entitled “Finding the Right Corporate Legal Strategy”. It talks about how companies should approach legal strategies. It classifies companies into these 5 categories based on how they approach legal issues:
- Avoidance: Some companies avoid lawyers and legal strategies at all costs, leaving them exposed and blind to legal strategies that could help them.
- Compliance: Some companies view the law as “an unwelcome but mandatory constraint on their activities”, which leaves the company ignorant of the law but generally in compliance.
- Prevention: These companies bolster their business goals with legal strategies and take an active approach to managing legal risks.
- Value: These companies have leaders with a strong understanding of laws that affect the business, and they use legal strategies to increase the company's return on investment (ROI).
- Transformation: These companies have properly integrated legal strategies into their overall business strategy. Their legal strategies are linked to their value-chain activities and those of their external partners. This integration gives the company a competitive advantage over competitors.
The goal is for a company to be transformational when it comes to legal strategies. There is some up-front cost to the preventative legal action, but it should give the company a competitive advantage in the long run.
Backcountry.com was not transformational and did not consider how tone-deaf its legal actions were to values-based customers.
Suggestions for Business Litigation
In the age of the “Cancel Culture”, companies and civil litigation attorneys must consider the optics of their legal actions. If not, they may alienate customers and clients. Many companies and law firms rely on social media and digital marketing to grow their business. If their social media accounts are littered with boycotts and blowback, their sales and reputations will suffer.
I office in a metropolitan suburb (Shakopee) and a rural town (Litchfield) in Minnesota. Each area has proud and very distinct cultural views. Business litigation clients can benefit from understanding those cultural views, especially if the case goes before a jury in these areas. Even the judges may view your case through the lens of their local community.
In my business litigation practice, here are a few things I do to protect my clients and myself from bad PR:
- Get a sense of the client's business model, values, and mission.
- Consider impact of a lawsuit on corporate stakeholders.
- Consider whether the opposing party is particularly vulnerable, sympathetic, or overmatched.
- Gauge the public impact of a dispute or lawsuit with that defendant.
- Imagine what a newspaper would say if it reviewed your court filing, or if the other party leaked documents to a journalist.
- Talk to the company leaders about integrating legal strategies into their corporate strategy.
- Where possible (and time allowing), check with company leaders about how aggressive they want you to be as the lawyer. They are in better position to understand their corporate stakeholders.
- Carefully word demand letters and court pleadings.
- Be diplomatic whenever possible.
- Treat the other party, lawyer, judges, and court staff with respect.
The business client may have PR people or a PR firm. If so, they should be consulted about the optics of the civil litigation.
The “Cancel Culture” presents unique challenges to businesses that dive into cultural issues and litigation. The reputations of the business and the attorney are at stake.
The business litigation attorney should explore the corporate client's mission and reputational risks when pursuing legal action. If the litigation strategy is aligned with the company's overall strategy, it will maximize your chances of a favorable outcome in the case.
If you proceed like Backcountry.com with aggression against small businesses, you risk a boycott of your brand. The bottom line is to be mindful of the PR issues when you litigate business disputes.