Who are you calling a troll?
As with patents, where the concept of trolling in intellectual property began, there is much disagreement over who qualifies as a trademark troll. But one thing is certain, says Simon Crompton: it is now a trend, and one that the speakers in today’s session believe lawyers need to take seriously.
Trademark trolling is a relatively new and undefined area. Today’s session will therefore take a broad understanding of it, explaining every aspect from mere aggressive enforcement to deceptive actions by individuals with no business of their own. Each speaker has responsibility for different parts of this range, with case studies and anecdotes set up to explain their real-world implications.
If one thing defines all trademark trolling, it is the attempted enforcement of rights by an individual who—allegedly—has no business owning them. “It is the attempt to own the unownable,” in the words of speaker Lance Johnson, from Roylance, Abrams, Berdo & Goodman.
The spectrum, for Johnson, then goes from “outright fraud, where the party asserting ownership has no legitimate rights whatever to the trade mark” to, at the other end, “a quasi-legitimate claim, deliberately set up to try and win financial compensation.”
For example, if a company was coming out with a new product and word of it leaked out—including the name—then a trademark troll would immediately try to register than domain name, buy AdWords on Google, and set up a fake company using that name so that they could try to assert prior rights.
“It’s more like claim jumping,” says Johnson. “The idea is that you establish these quasi-rights and then make it much easier for the legitimate company to buy them from you than to go through the legal processes necessary to have them transferred or canceled.”
Troll or not?
What Johnson leaves out of his definition of trademark trolling is aggressive enforcement of more legitimate rights, and it’s controverial whether this subject should be classified as “trolling.”
“The law, particularly on the civil side, does not have a good enforcement mechanism to stop aggressive enforcement,” says Johnson. “Because it’s subject to what a judge might think, what are proven to be legitimate rights, whether this is the expansion of an existing right, plus the concept of dilution and whether something is a legitimate exercise in protecting a famous brand.”
Adam Cohen of Kane Kessler will talk about aggressive enforcement on the panel. “The type of people involved in this varies considerably. There are individuals, who opportunistically register trademarks like Occupy Wall St or Linsanity. Then there are small companies that try to exclude the bigger rivals by owning descriptive phrases or elements crucial to design in their industry. And then there are the big companies who could be seen as doing the latter on a larger scale. There are big brands on either side of that debate.”
In Cohen’s view, these types of cases are often dealt with by lawyers individually, when they come up, but few people are looking at them as a trend. “Do we want legislation to address this? Or will that just lead to greater uncertainty, both now and when we actually have the law? And either way, what do we responsibly advise our clients in the meantime?” Cohen asks.
Lance Johnson’s most significant experience was with an individual who certainly qualified as an aggressive enforcer. Johnson will tell the story of how he filed counterclaims against Leo Stoller’s claims for trademark ownership, and eventually won an injunction that prohibited him from participating in the federal courts.
“I hope that working through some of the strategies used in that case will provide some useful tips for lawyers and their clients that come up against similar situations themselves,” says Johnson. In particular, he will provide advice on ways to counteract a troll’s actions and make them reconsider whether the action is worth pursuing.
“That’s the hardest thing about tackling a troll: convincing them that this is more hassle than it’s worth, so you can settle quickly or get out of the case altogether,” says Johnson, adding that the best route can be to craft a civil claim for unfair trade practices. Unlike a criminal case that would require proof beyond reasonable doubt, this civil route merely requires proof based on a preponderance of the evidence.
“The key is to put something in front of the judge that they can understand—the idea being that if something is criminal in nature it must by definition be civilly unfair to engage in that conduct,” says Johnson. He hasn’t used the strategy since, but only because the opportunity hasn’t arisen reinforcing Adam Cohen’s point about seeing these cases as a trend, even if they only come up rarely.
The chair of the panel is Mitch Milstein of Quiksilver, who will relate his experiences of trolling. He came up against Stoller when he joined Quiksilver six years ago, as Stoller was attempting to enforce rights to the trademark Stealth—which Quiksilver used as one of its ‘style’ or product names. The company creates thousands of these each season and most only appear in small print on garment labels.
“That was my first experience, but we’ve come up against it a few times since,” says Milstein. “It’s something that can be draining on a company, in terms of time and money. The Stealth case was actually quite easy, but others have gone deep into litigation. We’ve always settled those, but at some point if there is one that is ridiculous and we feel we shouldn’t pay, then we will take it to trial. You need to stand up and make a point.”
Johnson has similar feelings on the issue—one reason he eventually resorted to working for his client in the Stoller cases on a pro-bono basis. And all speakers will be keen to make that point to the audience today.
The impact of the America Invents Act
One of the aims of the America Invents Act (AIA) was to reduce the amount of patent trolling by lowering the cost of pursuing IP rights. But while lawyers are optimistic that it will help in the fight over nuisance patents, will it have any positive effects on trademark trolling?
Lance Johnson is skeptical: “The procedural changes wrought by the AIA for civil litigation preclude the type of mass defendant cases that have characterized patent infringement allegations by non-practicing entities seeking a payoff. Trademark infringement is, by its nature, handled on a case-by-case analysis that makes the proceeding personal between the plaintiff and the defendant. Mass allegations of trademark infringement are very rare, if they occur at all.”
Trademark trolling also often involves cases of outright fraud, which will obviously still remain subject to laws of perjury and the procedural safeguards around only signing and filing genuine documents.
As to the cases of aggressive trademark enforcement, which only some think should be considered part of the trolling debate, these remain a matter of perspective: one man’s aggressive enforcement is another’s defence of legitimate rights.
CM20 Trolling the Trademark Waters takes place in room 207 AB today at 12:00 pm