Kommersant

Intellectual property lawyer Ekaterina Konovalova on patent trolls. The article deals specifically with the peculiarities of the activities of patent trolls in the field of trademarks in Russia

A troll in Norse mythology was an ugly creature that lives under a bridge and demands payment from travelers to cross it. Legends about mountain, forest and bridge trolls had already existed for several centuries, when in the 20th century a new species of such creatures appeared, frightening business participants no less than its predecessors, Norwegian travelers.

A patent troll is a person who specializes in bringing patent lawsuits.
The term “patent troll” was first used by Intel lawyer Peter Detkin in 1999, when TechSearch accused Intel of illegally using patented technologies. He used this glib term to describe patent holders who do not have their own products but are making frivolous patent claims against the actual manufacturers of the products.

It is interesting to note that Intel emerged victorious in its lawsuit against TechSearch, and Peter Detkin became the managing partner and shareholder of Intellectual Ventures, a company specializing in the consolidation and licensing of intellectual property, often cited as an example of patent trolling.

In English, there is a division of patent trolls into “patent troll” (patent troll in its original form, that is, pursuing patent infringement) and “trademark troll” (troll claiming violation of the exclusive right to a trademark). There is no special term for the latter in Russian, and such entities are also called patent trolls, despite the fact that their activities are not related to the possession of patents.

Despite the lack of an official name, the phenomenon of patent trolling in Russia has been gaining momentum over recent years, and will most likely receive a new round of development after individuals gain the opportunity to register trademarks.

Patent trolling in the field of trademarks has various forms, but the essence of the phenomenon remains constant: the trademark owner makes demands on another person, in his opinion, violating the exclusive right to the trademark.

The difference between a patent troll and a bona fide copyright holder defending his exclusive right is that a patent troll, like a troll under a bridge, does not use his exclusive right, but demands payments for its use or violation from other persons.

The activity of a patent troll is divided into two stages: acquiring an exclusive right and receiving benefits.

At the first stage, actions are taken to register a trademark or to acquire an exclusive right to an existing trademark.

A patent troll's portfolio typically contains many trademarks that may be subject to protection. Such items may include trademarks that are initially of low distinctiveness, contain commonly used words, or easily reproduced graphic elements. This “weakness” of objects allows an increase in the number of potential violators.

Also, a patent troll can acquire the exclusive right to an old, unused trademark and make claims against persons using the disputed designation in the absence of claims from the previous copyright holder.

One of the effective ways to replenish the portfolio of assets of a patent troll is to register trademarks of companies that have not yet entered the Russian market. In order to register a potentially profitable trademark, a patent troll searches for companies that have the prospect of entering the Russian market, or entering an IPO.

It should be noted that, firstly, a trademark has a territorial principle of action, that is, it is protected only in the territory of those countries where it was registered by the copyright holder. Secondly, in Russia, as well as in most other countries, the “first to file” system operates. This means that the priority of a trademark is established by the date of filing the application for a trademark with Rospatent.

When the exclusive right to a trademark is obtained, the troll looks for its violators.

The requirements of a patent troll at the second stage of its activity are as follows:

• concluding a license agreement and making regular payments;
• concluding an agreement for the alienation of the exclusive right to a trademark in favor of the “violator” for a significant fee;
• threat to go to court with a claim to protect the violated exclusive right if the “violator” refuses to settle the issue by paying the specified amounts.

If you receive a claim of infringement of an exclusive right to a trademark, you must answer the following questions:

• Is the sign you are using confusingly similar to the trademark of the copyright holder?
• Is the trademark of the copyright holder actually registered and not at the stage of consideration of the application by Rospatent?
• Are you using the trademark of the copyright holder specifically in relation to those goods and services for which it is registered?

If the answer to the previous questions is yes, there is most likely a violation of the exclusive right to a trademark. However, it is necessary to find out whether its copyright holder is a patent troll. To do this you need to answer the following questions:

• Can you find evidence that the copyright holder is using the trademark?
• Does the claim you receive contain an invitation to negotiations, terms for a peaceful resolution of the conflict, or does the copyright holder only demand monetary payments from you and threaten legal proceedings?
• Does the complaint offer a reasonable period of time to review the requirements and resolve the situation?

If you answered no to two or more questions, most likely you have encountered a patent troll.

Many business participants prefer not to enter into what they see as costly and long-term litigation, but to make concessions to the patent troll. However, in many cases, patent troll claims can be effectively combated.

The main way to combat a patent troll is to destroy the object of exclusive right, that is, challenge the trademark.

An objection to the provision of legal protection to a trademark may be filed with the Chamber for Patent Disputes of Rospatent. However, to file such an objection, there must be grounds in the form of non-compliance of the trademark with legal requirements.

In a situation where a trademark registered by a patent troll is a designation that actually belongs to another person, the patent troll's actions related to providing legal protection for the trademark may be considered an act of unfair competition or abuse of rights.

Patent trolling is a negative phenomenon that has affected many countries and at the same time does not have the only correct way to confront it. However, there are steps that will help reduce the risk of encountering a patent troll:

• Timely filing of an application for trademark registration before the product is put into circulation;
• Advance planning for entering the international market and filing an application for trademark registration in the jurisdictions you are interested in;
• Recording the introduction of new designations during brand development, saving advertising materials or websites with a date fixation. Even with the first to file system in force in Russia, the presence of evidence of the use of a designation before the priority date of the opponent’s registered trademark can strengthen your position in the legal process;
• Regularly conduct searches for trademark applications similar to your designation. If you identify an attempt to register your designation or a designation that is confusingly similar to it, send an appeal to Rospatent against granting legal protection to the trademark at the stage of consideration of the application;
• Seek qualified assistance in the field of intellectual property to fully protect your business;
• It is important to note that patent trolling, due to the lack of administrative or criminal liability, must be combated with the levers offered by civil legislation. It is possible to fend off a patent troll, but it requires a strong strategy to protect your intellectual property.

Ekaterina Konovalova

Source: Kommersant