How to deal with Trademark Trolls

Shutterstock

A Trademark Troll is someone who registers a trademark with malicious intent. They register a mark for a name or a logo that is already being used by another company, with no intent to use it themselves and then sue the original company for trademark infringement. The majority of their targets are small to medium-sized businesses and in the number of trademark trolls is increasing therefore your company needs to know what it can do to protect itself.

How can a troll seek to profit from your brand?

A troll could attempt to threaten your brand through registering a trademark in a jurisdiction into which you are likely to expand into in the future. When your company applies for a trademark in the new jurisdiction, you would then find that your mark had already been registered and that you would have to negotiate a deal with the troll to be able to use it.

Trademark trolls are extremely common in first-to-file countries such as China as it is generally the company that first used the brand name in their country that owns the rights to it, not the one that has been established for the longest amount of time in total. Some chinese companies have now taken to registering names of big foreign corporates in order to profit from them. When the corporate tries to enter the chinese market they would be forced to either fight for their rights in court, rebrand their product or give in and buy back their own trademark.

Although trademark trolls have been known to target well known brands they mainly target brands that have not yet been fully established as these may not have yet applied for a trademark.

The troll would then apply to register a trademark for the brand before the original company tries to, sometimes including unrelated categories to increase its value. Once the troll has successfully registered the mark they will then contact the company, informing them that in order to continue using the mark they would have to either licence or purchase it. If the company refuses to accept either of these options, the troll could file a lawsuit for trademark infringement against them.

How can this impact my business?

If a troll registers a trademark for your brand it can have a significant impact on the future success of your company. The troll could prevent your brand from expanding, from protecting itself against infringement and it would prevent you from legally being allowed to use your own mark.

If this did happen, you could either negotiate with the troll to buy back or licence your brand or you could choose to rebrand. The second option, although not ideal would mean that your company could start afresh and apply for a trademark straightaway to protect your brand.

What should I do if a troll registers my mark?

As long as you can prove that you are the true owner of the mark (through evidence of use dated before the registration), that consumers could confuse the two marks and that the mark was registered in bad faith (i.e they had no intent to use it) you can attempt to fight back.

If you are contacted by a troll who claims to have registered your mark, seek legal advice.

What can I do to prevent my brand from being a target?

It is always recommended to file a trademark application before launching your product or services into the marketplace to ensure that they are fully protected. Furthermore, businesses should plan their Trademark portfolios based on long term business projects rather than their current activity in order to avoid future conflicts. You should also update your trademark portfolio on a regular basis to ensure that your brand is protected from every angle.

If you registered a UK trademark you can sign up for simple trademark alerts from the IPO here. This will flag any filings which directly conflict with your mark so that you can oppose them as soon as they appear. It is worth investing in a more comprehensive watch service which will flag “sound alike” conflicting registrations and similar logo designs.

For advice and more information on searching, acquiring, registering and enforcing Trademarks please visit our website, http://www.lipex.com.

Our unique database of trademarks for sale or license could save you time and help protect your brand.