Trademark trolling refers to the practice where individuals or entities exploit the trademark system by registering trademarks, often on common or generic terms, with the primary aim of profiting through legal threats, demands for licensing fees, or settlements, rather than actually using the trademark in commerce. This practice is generally regarded as being in bad faith, as the troll is not genuinely interested in building a brand or offering goods or services under the trademarked term. Instead, they seek to capitalise on the legal protections provided by trademark law by targeting legitimate businesses.
Key Characteristics of Trademark Trolling:
- Bad Faith Registrations: Trademark trolls frequently register trademarks for common words, phrases, or names that they anticipate others might wish to use in the future. Typically, they have no real intention of using these trademarks in a meaningful way themselves.
- Legal Threats and Demands: After securing a trademark, the troll monitors the market for anyone using the trademarked term. They then issue cease-and-desist letters, demand licensing fees, or threaten legal action against these businesses or individuals.
- Exploitation of Small Businesses: Trademark trolls often target smaller businesses, which may not have the financial resources to endure lengthy legal disputes. As a result, these businesses may opt to pay a settlement or licensing fee rather than face the costs of litigation.
- Little to No Actual Commerce: Unlike legitimate trademark holders who use their trademarks in the sale of goods or services, trademark trolls typically do not actively engage in commerce under the trademark. Their primary goal is to exploit trademark rights for financial gain through litigation or settlements.
Why Trademark Trolling Is Problematic:
- Unfair Burden on Businesses: Trademark trolling places an undue burden on businesses, particularly smaller ones, which may be forced to rebrand, pay settlements, or engage in costly legal defences.
- Chills Innovation: The threat of being targeted by a trademark troll can deter businesses from using certain terms or entering specific markets, potentially stifling innovation and competition.
- Misuse of the Trademark System: The trademark system is designed to protect brands and consumers, ensuring that trademarks are associated with specific goods or services. Trademark trolling undermines this system by using it primarily as a tool for financial exploitation rather than genuine brand protection.
Legal Responses to Trademark Trolling:
Some jurisdictions have begun to implement measures to counteract trademark trolling. Courts may cancel trademarks registered in bad faith or determine that a trademark has become generic if it is not used to distinguish the goods or services of one entity from another. Additionally, legal reforms in certain regions aim to make it more challenging to register trademarks without a genuine intent to use them in commerce.
Case Studies on Trademark Trolling
1. The Sandwich Shop vs. Ian Buchan
Background:
In Scotland, The Sandwich Shop, a small franchise, found itself embroiled in a legal battle when a third party registered the trademark for “The Sandwich Shop” after noticing that the franchise hadn’t done so.
The Dispute:
The third party, Iain Buchan, a Scottish businessman, essentially held the trademark “ransom,” demanding that the franchise either cease using the name or pay a substantial fee to continue doing so.
Outcome:
After a prolonged legal dispute, the case was settled out of court. The Sandwich Shop franchise agreed to pay a sum to regain the rights to its name. The settlement details were kept private, but the resolution highlighted the vulnerabilities businesses face when their trademarks are not registered.
Implications:
This case serves as a classic example of trademark trolling, demonstrating the importance for businesses to proactively register trademarks to protect their brands from predatory practices.
2. Edge Games vs. Various Video Game Companies
Background:
Tim Langdell, owner of Edge Games, became notorious for trademark trolling by aggressively enforcing trademarks on the word “Edge.” He targeted several video game companies, including Electronic Arts (EA) for their game “Mirror’s Edge.”
The Dispute:
Langdell sought settlements from various companies by claiming infringement on his “Edge” trademark, despite not using the trademark in any meaningful way.
Outcome:
In 2010, after years of legal battles, EA successfully challenged Langdell’s claims, leading to the cancellation of his trademarks. This case is a significant victory against trademark trolling in the gaming industry.
3. Leo Stoller and the Word “Stealth”
Background:
Leo Stoller gained infamy for registering a wide array of trademarks on common words like “stealth” and “allied.” He would then send cease-and-desist letters to companies using these terms, demanding licensing fees.
The Dispute:
Stoller’s tactic involved targeting businesses that used these common terms, regardless of the context, to extract financial settlements.
Outcome:
In 2006, the U.S. Patent and Trademark Office (USPTO) revoked many of Stoller’s trademarks, recognising that his activities were more aligned with trademark trolling than legitimate business.
4. Monster Cable vs. Small Businesses
Background:
Monster Cable, known for its audio and video cables, aggressively pursued legal action against any company that used the word “Monster” in their branding, regardless of industry. This included targets like Monster.com and a mini-golf course called “Monster Mini Golf.”
The Dispute:
Monster Cable’s aggressive legal actions, even against unrelated small businesses, earned them the label of a trademark troll.
Outcome:
While successful in some cases, Monster Cable faced widespread criticism, and its reputation suffered due to its aggressive tactics.
5. Genuine Fan Inc. vs. Fan-Related Businesses
Background:
Genuine Fan Inc. registered trademarks for the phrase “Genuine Fan” and targeted businesses that used the word “fan” in relation to sports, entertainment, or merchandise, demanding licensing fees.
The Dispute:
Many businesses argued that “fan” is a generic term and shouldn’t be monopolised by a single entity.
Outcome:
The efforts of Genuine Fan Inc. were largely unsuccessful as many targeted businesses fought back, criticising the company for engaging in trademark trolling.
6. Red Bull vs. Small Businesses
Background:
Red Bull, the energy drink giant, is known for vigorously protecting its trademark, often targeting small businesses that used the word “bull” or similar in their branding, even if unrelated to energy drinks.
The Dispute:
Red Bull’s legal actions included demands for small businesses to rebrand or pay settlements, placing a heavy burden on these businesses.
Outcome:
While Red Bull achieved several settlements, the company faced significant public backlash for its aggressive tactics, which were seen as overly harsh, especially against small businesses.
Conclusion:
These case studies highlight the various ways in which trademark trolling can impact businesses, often forcing them into costly legal battles or settlements. They underscore the importance of timely trademark registration and the need for legal reforms to prevent the misuse of trademark laws.
