San Francisco attorney David Barry has battled companies over their trademarks for over 20 years. Now he's taking on the NAR's service marks Realtor™ and "Realtors™. But this is hardly a war fought over altruistic principles - there's bigger ground to conquer. Barry's out to bring down the NAR's control over MLSs and their listings - state by state, suit by suit. On February 8th, Barry and the NAR's Laurie Janik will meet in front of the Trademark Trial and Appeals Board of the U.S. Patent and Trademark Office to present their sides on an issue that is important to the real estate industry. The question to be decided by the board is whether or not the NAR's servicemark Realtor™ is a generic word or a word that can be protected as a trademark. It is Barry's position, representing his real estate agent clients, that 'Realtor' is a generic word that has been misappropriated by the NAR to strengthen its position as a real estate trade association in order to protect monopolies on listings inventories for its members. Find out what David Barry's end game is in this exclusive Agent News interview with publisher Blanche Evans. B.E.:Why go after the NAR's trademarked word "Realtor?" D.B.: NAR needs to lose the mark for the same reason that thousands of marks are cancelled every year - the marks are generic or otherwise invalid and violate the Lanham Act. NAR used a generic mark to become the largest trade association in the world, but two-thirds of their members belong involuntarily. Do a random poll of real estate agents who are currently members of NAR. How many of them would voluntarily pay the approximately $250 a year it costs for membership in local, state, and national associations? How many pay for all three only because their broker tells it's a condition of affiliation with the office? If I told you the American Bar Association owned a trademark on the word "attorney" and was planning on charging lawyers $250 a year to call themselves lawyers, would you laugh? How about the American Association of Hair Stylists owning "barber" as a trademark, and charging barbers $250 a year to put the word "barber" on the their store window? The fundamental reason that generic words are forbidden as trademarks is that they are understood as common descriptors of things and categories, and giving ownership rights in such words gives an unfair advantage to such owners against others who sell the same category of goods. B.E.: Why now? D.B.: In America, people pay to join trade associations because they get their money's worth from the dues. With NAR, realty agents are forced to pay. Thus, the work I'm doing for the realty agents who hired me is to make local, state, and the national associations behave like the other trade associations in America: to obtain members through voluntary choice - not coercion. B.E.: What does that have to do with the trademark? D.B.: The Trademark thing is a piece of the puzzle. It has another layer, and it is ongoing. I represent the same plaintiffs that are bringing trademark case, and I also represent them for membership abuses. They are forced to buy membership at all three levels, and that's price fixing. The brokers buy the memberships, the broker makes them pay it back. If you are a broker and go to board of realtors, they will say you have to buy all three. What if I just want to buy Dallas? How many agents are in the office - 15, 16 times $250, and you are obligated to pay. If you want to work in my office, you have to pay the dues, but in terms of legal liability the pinch is put on the broker. In Texas you have to join the local board to get to the listings. In California, there was a challenge to that - the MLS is too important to be held by a trade organization, and in some federal laws that is true. B.E.: Are you saying that a Realtor can't use the local MLS as a member unless they belong to all three levels of associations? D.B.: First, an agent has to pay board dues to get the MLS, there are also state and national dues. They fix prices with the others. It is a sick industry and there are a number of violations going on. Corporations aren't allowed to divide up territories, that is price fixing. NAR has done that with the boards of realtors. In Honolulu they fix prices, so you can't shop around for a better deal for an association. In terms of the lawsuit, we are seeking damages of dues that were paid involuntarily, and we can do that for anybody in the country. B.E.: Are you saying you're planning a class action suit? D.B.: No, it is not certified as a class action. You don't need a class action to prosecute a case like this. B.E.: Do you know what the NAR's defense will be? D.B.: They don't have one. The trademark - the key issue - is what goes on in the mind of the consumer. They've offered their own survey, done among their members. The cases that have held up include surveys of pools of people who are the consumers, the people in the business always know the buzzwords. Trademark law is directed to the average person on the street. That's not a trademark defense. The issue is what is the significant in the mind of the consumers - does it designate a brand name or does it indicate what the product is? Table salt is a common name so you can't get a trademark on table salt. Barber is a common label for an occupational class, and most people believe that a Realtor is the common label for an occupational class for people who assist you in a real estate transaction. B.E.: So this is about dismantling the term Realtor to start on antitrust suits. D.B.: Access to the board to get listings is a different violation. The state courts are unanimous, if membership is essential to do business, then it is antitrust to condition membership on buying a membership. I'm surprised no one in Texas has challenged that. B.E.: How many states have ruled on that? D.B.: About ten. There are over forty cases and the real estate associations lose almost every one. In the states where you don't have to join the local board, then they join to call themselves a Realtor. They are maintaining an invalid mark to boost their membership. B.E.: The NAR offers quite a few benefits for their membership dues. In fact, you could safely say their dues are a bargain. D.B.: Only if you want them. If they are forced on you, then that is the opposite of a bargain. If they are such a bargain, why don't they make it voluntary? B.E.: How do you know most members don't join voluntarily? D.B.: Do you know what the rate of joining trade associations is in this country? What percentage join? 16 to 44 percent join, depending on the occupation. Insurance is 16 percent. Law and medicine are 44 percent. I think if NAR were typical, and they do a lot of good things, they would fall in the range of 16 to 44 percent. There are 2.1 million licensees, but only half are active. They report that way on the census and only 800,000 reported that they were real estate licensed. In California, it is the same license for mortgage brokerage. In the insurance industry - what do they pay? What do the medical professions pay? The trade organizations offer education, lobbying, advocacy, so what does it cost to do that? The cost of a publication is the same run by one trade association as another, so their dues should be kind of similar. B.E.: Again, why home in on the NAR? D.B.: It didn't start with NAR. There is price fixing in the San Diego MLS. It has gotten limited publicity. We lost that case. Our District judge tossed the case out because five associations combined to produce the MLS entity. They had separate MLSs and pooled them to create one. Half of the boards are served by a regional MLS, so what the folks in San Diego did was rig it so that agents didn't buy all the services from the MLS, but bought some from the associations. The agent would buy the MLS from the central organization - Sandicor - and then Sandicor would give you full MLS services, but they contracted with local associations to do enrollment, quarterly billing and support and each board had cost services, and they got together to fix the price. They are competitors, and they sell MLS services, and they fixed the price, and under the law, if you have people who are independent financially, then you can't do that. Many have been sued for price fixing, if you go down those lists, they are cheating people, antitrust laws are criminal laws, and they are cheating the public, but this case is interesting because this trade association is cheating its own members. No one has fought back because they are stealing from their own members. They aren't going to tell you about their own violations. There is a different point of view, and you can repair the damage that is being done. B.E.: If this is true, then why don't more Realtors object? There's always a minority in any group that isn't happy with leadership. D.B.: No one has challenged it, and that is fascinating - this collective loss of volition, in a way. Every other group would fight back. Maybe they don't feel that they are being cheated. Real estate agents make ideal victims - they are atomistic. When they work in a large office they are contractors, not employees. It's not a law firm or engineering firm, it is all one private violation after another against individuals. Where is an individual contractor going to go out and hire a lawyer and defend her rights? In this case, it is the trade association that is doing the violation. Tomorrow, look for an exclusive interview with Laurene Janik, counsel to the NAR.