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| Trademark Extortion |
| Last Updated February 17, 2009 |
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Let us begin by defining the word extortion:
Extortion (Black's Law Dictionary - 6th Edition) is defined as: Property can be money as well many other things. It could also be the act of scaring someone into stop selling something the they ahve a legal right to sell, that would be loss of market, i.e., profit (money). We limit our definition of Trademark Extortionist to those who demand money, or threaten to demand money, as part of their Cease & Desist demands. Those others, who are trying to scare off the competition just with improper claims of trademark infringement, we call scumbags and The Tabberone Trademarks & Copyright Abusers' Hall Of Shame is full of them. We list those that we have heard about at the bottom of this page. Also, the money demanded usually has little or no relation to the amount of money actually spent. We have long documented corporate lawyers using the "fear" of being hauled into federal court to demand money from alleged infringers. While there are numerous real infringers out there, here we document those we believe are using extortion as a source of revenue. And, they don't have to send Guido to your place to breaka you arms. The first Trademark Extortionist we heard about was Major League Baseball Properties in 2003. Then came Continental Enterprises who was representing Heineken Brewery. And there are many others. While trademark owners must "police" the marketplace for infringing competition, it is a cost of doing business, much like liability insurance, a copy machine, or a break area with coffee machine. In September 2007, Kenneth L. Port, of William Mitchell College Of Law, wrote a paper titled Trademark Extortion: The End Of Trademark Law. We discuss that paper here. You can read it yourself. in word document format or, if you prefer, in PDF document format. Both versions are 72 pages long. He appears to have researched 3,500 trademark cases from 1947 to 2005 for his data.
"The normal course of conduct is the trademark holder sends a cease and desist letter to an offending user of a mark and objects to that usage.
If ignored or the other party responds that it will not cease use, an infringement or dilution law suit may result. This is the normal, rational course
of conduct in trademark litigation."
"Today, trademark holders are using this course of conduct to expand their trademark rights, not just to object to truly objectionable uses.
That is, some trademark holders send thousands of cease and desist letters to the point that there are now “sample” cease and desist letters available on the Web.
These cease and desist letters are followed by hundreds of trademark infringement filings. These cases are not necessarily prosecuted to a conclusion on their
merits. In fact, if prosecuted to a trial on their merits, the trademark holder/plaintiff would likely lose because they are not always meritorious claims.
This conduct is referred to as “strike suits.” These are law suits and, in the trademark context, cease and desist letters that have a different objective than
to merely stop the use or conduct of the would-be defendant. Their objective is to raise the cost of market entrance or continuation for the competitor." “A strike suit is defined as '[a] suit . . . often based on no valid claim, brought either for nuisance value or as leverage to obtain a favorable or inflated settlement.' quoting Black's Law Dictionary 1448 (Bryan A. Garner ed., 7th ed. 1999). Trademark Extortion: The End Of Trademark Law page 4 footnote #19. Since 2001, through 2005, trademark lawsuits reaching trial dropped by 40%. From 1998 to 2005, annual aggregate awards for damages dropped by 99%. In the meanwhile, the number of trademark infringement lawsuits being filed is going up every year. From 1947 to 2005, only 51% of trademark infringement lawsuits were won by the rights holder when the case went to trial. Trademark owners were successful only 55% of the time getting injunctions for the same time period. And, in only 5.5% of the cases were damages awarded. In 2000, the courts awarded attorney fees to the aggregate tune of 1.4 million dollars. By 2005, the aggregate total of attorney fees awarded by the courts was ZERO. As for the threat of treble damages as allowed under the Lanham Act, treble damages are not awarded very frequently. In 2005, like attorney fees, the courts awarded no treble damages although they were requested in 28 cases that went to trial.
"Therefore, the only variable that suggests an explanation of this data is trademark extortion. Trademark holders are encouraged to be predacious.
They file suit with no intent to prosecute it to a conclusion on the merits. Therefore, the number of cases initially filed increase, but the number of cases that
reach a trial on the merits remains constant and all other indicators free fall. This predatory conduct is leading to the end of trademark law, an end to the public
resolution of conflict between trademark holders and an end to the rational use of the Lanham Act as a vehicle to define trademark rights in America.
Perhaps American antitrust laws should be specifically amended to make trademark extortion illegal." While Port's paper focuses on companies using "strike" lawsuits, we focus on those companies, and their representatives, who threaten lawsuits while demanding to be paid off in the process. To us, those are the Trademark Extortionists. Also, read Trademark Registrations Owned by Leo Stoller & Central Mfg. Sold, a press release about a group who bought up the estate to stop the trademark extortion he was doing. For more on Leo Stoller, visit this web site about him http://stollerexposed.blog.com (a new browser window will open). The web site claims, "It is meant to be factual first; after that, it is satirical, sardonic, twisted, but always meant to be done with a degree of good taste about a man who always operates in poor taste." |
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Companies That Engage in Trademark Extottion Here is a list of companies that we feel are, or have been, engaged in Trademark Extortion. This list includes companies who hire Cyber Cops to do their dirty work for them.
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