Warning on trademark trolls

[Brian Turner]

Very interesting investigation from the BBC, highlighting how "trademark trolls" are contacting companies claiming royalties for trademarks - which the companies themselves should already own outright:

http://news.bbc.co.uk/1/hi/scotland/7330714.stm

Basically, a business owner gets a call or letter out of the blue stating that they are trading under an existing copyright, and to either pay royalties, or else face crippling costs in damages:

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The troll typically registers the name of an existing business as a trademark, then demands cash to lease or sell it back to the original company.
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Features include offers to sell trademark rights, or else threaten litigation potentially "costing millions".

However, as the article warns that these trademark claims are usually still in the application stage - meaning they haven't even been registered - and are unlikely to succeed anyway because a business has already been trading with it.

[quote]

"You cannot get a trademark for an existing and established company name. Even if these companies did not register the trademark themselves, by simply trading under that name for a significant amount of time it builds up a reputation in a trademark.

"This is what gives it value and goodwill. It is the use and goodwill, more than the fact that it is registered, that gives a trademark value which can then be protected. And in this case, he doesn't even own the trademark yet anyway, which puts him in an even weaker position."
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