Trademark and Patent "Trolls" Demand Their Price to Cross the Bridge

Those of you savvy with the internet may be familiar with the term “trolls”.  It generally refers to individuals who post inflammatory or provocative messages online, often in an attempt to harass others.  The term “patent troll” refers to an individual or company who buys and then enforces patents against an alleged “infringer”, usually in an opportunistic manner.  Blunter individuals would refer to them as extortionists.  Similarly, the term “trademark troll” refers to an individual or company who attempts to register and enforce a trademark without any real intention to use that trademark, in an attempt to force others who use the same (or a similar) mark to pay them.  The “troll” part of the name is a reference to the attempt to collect a toll from vulnerable people.

For the most part trademark trolls have had little success, as simple registration of a trademark does not give exclusive rights over the mark; Courts look for ‘actual use’ of the mark in commerce.  Unfortunately patent trolls are another matter. These individuals often purchase dozens if not hundreds of patents cheaply from bankrupt companies, and then file demands or lawsuits against any company arguably infringing on the patent.  Often the claims are legally specious, and rely upon the theory that a quick pay-out will be made rather than incur the costs of litigating the matter.  Texas has apparently become a hotbed for these types of companies, and the issue is expected to continue to grow in 2012.

Trademarks and patents are not the only areas in which opportunistic individuals can prey.  It is important that one understand their rights and obligations when buying or selling a business, including the rights and obligations that may be associated with the goodwill of the business, any potential trade secrets, and express and contingent liabilities.  An ounce of prevention in this regard can often avoid substantial expenses and stress later. If you have any question about your legal rights do not hesitate to contact our offices.

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