Here be trolls

IT’S a nightmare scenario for small businesses. You’ve set up on your own, the tills are ringing and the company is beginning to pull in a profit. Then a letter arrives through the door, accusing you of trademark infringement and threatening to stop you operating unless you pay a lot of money to the trademark’s owner.

The practice, according to BBC Scotland, which caused chaos in the US, has now hit our shores. The owners of two juice bar businesses in Glasgow, one of them the city’s Young Entrepreneur of the Year, were contacted by John Blanchard, of Never Give Up Ltd, who claimed they owed his company a licence fee running to tens of thousands of pounds.

The BBC investigation found that Never Give Up has attempted to register trademarks for around 34 different juice-related names, at least four of which belong to existing juice companies, at the government's Intellectual Property Office in Newport.

However, most of them, including the two Glasgow businesses, are still in the application stage, and Mr Blanchard doesn't even own them yet.

Trademark and patent trolls have become such a problem in the US that corporations like Google have taken expensive legal action to curtail their activities. Typically, a troll will register the name of a business already in existence and then demand money to lease or sell it back.

Trolls may not be on safe ground when engaging in this kind of practice, as companies that trade under the name for a considerable period are responsible for building the reputation of the trademark – something the courts will take into consideration.

However, says Dr Gillian Whitfield, Astrum managing director, the safest option is to register the trademark when the company is formed. “You can apply for it, and use the ‘TM’ mark even while it is in the application process,” she said.

“While many troll cases have been thrown out as worthless, you have to ask yourself if you have the time and the resources to fight this case. Better safe than sorry.”