We've Had Patent Trolls And Copyright Trolls... So Why Not Trademark Trolls?

from the this-ought-to-be-fun dept

Wed, May 27th 2009 11:19am — Mike Masnick

Most folks have heard about "patent trolls" (even if the name is in dispute) and generally associate it with companies that don't do anything other than threaten/sue over patents. Then, we had stories about music copyright trolls, who were gaining the rights to songs (though, in some cases there was evidence that these copyrights were gained through highly questionable means). So, it was really only a matter of time before we got "trademark trolls," as well. To be honest, we've had a few stories about a guy named Leo Stoller, who has been dubbed a trademark troll after registering trademarks on all sorts of common words and then insisting no one could use those words without paying.

However we hadn't seen much evidence of "professional" trademark trolls until alerted to this story by Eric Goldman. Basically, it's a story about an auction site for guns that went to court to ask for a declaratory judgment against gun maker Heckler & Koch (HK). But perhaps the more interesting party is a company called Continental Enterprises (CE). GunBroker apparently received a letter from CE claiming trademark (and copyright) infringement because certain HK guns were up for auction on the GunBroker's site.

Of course, it's difficult to see how GunBroker has any direct liability. First, accurately listing a product for sale isn't likely to be found as infringing (i.e., if I own a Apple iPod and list it for sale as "Apple iPod for sale" that's not a violation of Apple's trademark). Second, since all of the complaints were apparently for user listings, it's hard to see how GunBroker is liable. The copyright claims, one assumes, would get tossed out on a DMCA safe harbor review. Unfortunately trademarks appear to be something of a loophole, in that they're not really covered by the DMCA or CDA safe harbors. However, common sense should take care of the fact that it's not GunBroker doing the infringing.

But the post goes on to highlight some additional questions about CE, including a link to a web page that dissects how CE apparently operates, and it sounds quite similar to a typical "trolling" sort of operation. According to the various websites, CE contracts with companies/law firms to act as "representatives" for trademark holders, and then goes searching for "anything they can remotely claim is infringing." Then, it sends a threatening letter, demanding compensation, even if there's no actual infringement. Apparently CE gets a cut of any money it squeezes out of companies, so it has plenty of incentive to send out threatening letters even when there's no infringement whatsoever. Apparently, it's worked with companies including Heineken, Home Depot, Textron, Bosch, Black & Decker and others. It sounds like these companies are effectively renting out their brands to see if this company can scrape up any companies willing to pay out of fear.

This really isn't a huge surprise. When you let tools like patents, copyrights and trademarks be regularly abused in the market, it shouldn't be a surprise when companies are built up around abusing them for profit.

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Filed Under: trademark, trademark troll
Companies: continental enterprises

16 Comments

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ChurchHatesTucker (profile), 27 May 2009 @ 11:23am

Heineken, Home Depot, Textron, Bosch, Black & Decker
... Suck.

C'mon, you first-up-against-the-wallers. Blood meet stone.
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Tgeigs (profile), 27 May 2009 @ 11:44am

Son of a bitch
"According to the various websites, CE contracts with companies/law firms to act as "representatives" for trademark holders, and then goes searching for "anything they can remotely claim is infringing." Then, it sends a threatening letter, demanding compensation, even if there's no actual infringement. Apparently CE gets a cut of any money it squeezes out of companies, so it has plenty of incentive to send out threatening letters even when there's no infringement whatsoever"

Okay, the key there is that a bunch of websites (without mention on this site which sites) are claiming that that's how they operate.

Because if those websites are reputable then this would appear to be a fairly clear cut case of rackateering and the feds need to sic 'em up, lil buddy.
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Anonymous of Course, 27 May 2009 @ 12:01pm

CE is already a trade mark, isn't it?
When I see CE I think of the conformity mark.
The agencies responsible for Conformité Européenne
should sue these guys, to avoid any confusion.
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Hulser (profile), 27 May 2009 @ 12:20pm

Re: Son of a bitch
this would appear to be a fairly clear cut case of rackateering and the feds need to sic 'em up, lil buddy

If the government hasn't gone after patent and copyright trolls, why would they go after trademark trolls? The short answer is that corporations have convinced the government and many people that patents, copyrights, and trademarks are actual property instead of a set of temporary rights which are meant to benefit the general welfare of the public. Yes, the feds should go after these trolls, but they won't.
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Designerfx (profile), 27 May 2009 @ 1:00pm

Uh, yeah we do
Mike, no trademark trolls? What about monster?
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JonMontgo (profile), 27 May 2009 @ 1:05pm

Isn't this like that music licensing company in Europe? The one that frightens people into paying them?
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Hulser (profile), 27 May 2009 @ 1:16pm

Re: Uh, yeah we do
There's a difference between a company who legitimately holds a trademark, but abuses it and a company that holds a trademark for the sole purpose of abusing it. Monster is the former. The latter is a troll.
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Anonymous Coward, 27 May 2009 @ 1:24pm

Re: Son of a bitch
A bunch of websites (without mention on this site which sites)... ? You mean you didn't actually read it all? What about http://tabberone.com/Trademarks/HallOfShame/CyberCops/ContinentalEnterprises/ContinentalEnterprises. shtml ?
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Tgeigs (profile), 27 May 2009 @ 1:29pm

Re: Re: Son of a bitch
Should have clarified, can't see the linked article at work, so I was hedging w/a supposition.
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The Trademark Troll, 27 May 2009 @ 6:36pm

CE as TRADEMaRK TROLL
i can't explain the GunBroker case but I have seen CE in operation and I don't think it is accurate to pin the troll label on them. Typically they represent companies that deal with large volumes of actual counterfeit goods. Instead of pursuing these infringing goods on their own they delegate CE to strike deals with the folks who are or may be infringing.

I am not defending them or how they get paid. I am suggesting that they simply stand in the shoes of the brand owners. Their conduct may be no better or worse than that of the actual brand owner. But the infringments are often real not imaginary.
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Seamus McCauley (profile), 28 May 2009 @ 3:56am

EULA trolling
The potential trolling that really worries me is EULA-trolling. At the moment lots of people (me included) sign up to EULAs unread on the assumption that the business providing the service I'm buying can't realistically screw me that hard and keep trading. But as businesses go under, I can envisage a resale market in all those unread EULAs that troll buyers can then have a go at making money out of enforcing on the service's (ex) users.
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Philipp Mueller (profile), 28 May 2009 @ 10:35am

trademark-trolling Germany
In Germany (as in most places), trademark law allows you to register any word/combination at the trademark office, however, the legality of the registration is only evaluated, if it comes to a legal conflict. Lawyers in Germany make use of this situation, by registering trademarks that legally cannot be registered and then sending shake-off letters to unsuspecting small companies, asking for reimbursements of their fees (around 500-1500 Euros) or threatening a court case.
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staff1, 28 May 2009 @ 12:27pm

do the math
"companies that don't do anything other than threaten/sue over patents"

is they have the patent that means they created/invented it. sounds to me like they've done quite a bit. do the math.
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Josh K, 2 Jun 2009 @ 10:30am

Misunderstanding of the purpose of IP
Of course there are practices that may go over the line, however, in general, "Trolls" as you all refer to them are not doing anything wrong and in fact serve a role in the American innovation system. Intellectual property rights are just that, rights, so they should not be diminished over anything less than a more important public interest.

See what I am talking about here,
generalpatent.com/2009/05/07/response-andy-grove
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Not, 18 Jul 2009 @ 10:59pm

Monster Energy
I got a letter from CE wanting me to pay $7500.00 for making Monster Energy stickers , I sold a few but NOT that many .. maybe $140.00 worth .. I told them I refuse to pay $7500.00 so they lowered it to $3500.00 .. I really dont think it's even fair to pay 3500.00 ..

What should I do in this case ?
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patenthitman, 16 Mar 2010 @ 9:31am

Speaking of patent troll... I'd like to suggest a defense to patent trolls and frivolous patent lawsuits!

http://patenthitman.com/
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