Published by LawTechie - May 18, 2012 - LawTechie

Internet LawNews out of the Eastern District of California is that a trademark troll has been taken to task by its would-be target. The EDCA ruled (on a default motion) that the Troll’s trademark ownership was null and void and, moreover, that the Troll’s notice-and-takedown freezing of its target’s website constituted tortious interference with a contract — in other words, the Troll now owes its target money. Premier Pool Management Corp. v. Lusk, 2012 WL 1593206 (E.D. Cal. May 4, 2012).

This is a surprisingly interesting case for several reasons:

  • The Troll was plaintiff’s SEO consultant who made a back-room deal with a third-party registrant of the trademark that plaintiff was using at the time (e.g., the third-party was first to register and there was an on-going dispute between plaintiff and the third-party)
  • The Troll bought the registration from this third-party for $5k for the alleged purpose of turning back on its client (the plaintiff) and extorting money to use/buy the trademark
  • The Troll actually sent a takedown request to plaintiff’s web host alleging trademark infringement in order to further “squeeze” the plaintiff into compliance
  • The web host voluntarily conceded to this SOPA-like takedown request

This case has so many takeaways:

1) Be wary of your SEO consultants!

2) Selling a trademark for $5k to someone who does not even operate in your field is a recipe for having the trademark invalidated (trademark transfers must include a transfer of goodwill which cannot be done if the new owner has nothing to do with the industry).

3) There seems to be a trend of de facto SOPA-like compliance by web hosts with trademark takedown requests despite the fact that there is no law requiring them to do so! It seems that all of our work to prevent SOPA from becoming law was for naught…

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.

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