They demand money for copyright infringements of photos, music, videos or software code – in some cases, for things they don’t even own. Each of these attacks must be taken seriously because the consequences of copyright troll attacks can be serious. For company lawyers, this means: Raise awareness among employees on this topic. Clearly identify the copyright details for each file used. Apply all legal means available against trolls to take the fun out of their damaging activities. But the first step in any good defence is to know exactly what you are up against.
Thanks to the film adaptations of The Hobbit and The Lord of the Rings, nearly everyone now knows what a troll is: A particularly unkempt, devious and brutal fantasy figure who doesn’t care about the wellbeing of others. German fairy tales and legends have long used the image of the bridge troll: a creature who guards bridges or fords to demand a toll or favour from travellers before it lets them pass. The dreaded patent trolls pursue a business line based on the bridge troll’s tactics. And now the era of digitalisation has ushered in a new form of this shrewd behaviour – the copyright trolls.
A troll is not interested in traditional business activities such as product development, production, marketing and distribution. Instead, it informs its victims that the service or product that they offer their customers has allegedly violated its rights. For this alleged and often minor infringement of the troll’s intellectual property rights, it demands sky-high royalties or horrendous damages. Victims who refuse to pay are threatened with interlocutory injunctions and time-consuming proceedings that have the potential to substantially impede their operational activities. Trolls do not perform any services; they only demand a ‘bridge toll’ from victims on their way to customers.
Patent trolls have been active since the mid-1990s and mainly employ three approaches. They apply for patents that are as vaguely formulated as possible, so that lawsuits based on possible infringements of intellectual property rights appear complex and threatening. They also buy patents from insolvent companies and sift through patent and contract law looking for the most subtle ramifications in order to construe infringements of intellectual property rights. Or they attend trade fairs to learn about innovations and then register the innovation as their own patent in order to beat the inventor to it or torpedo the inventor’s application. Different methods of attack but the objective is always the same: to collect excessive and often unwarranted royalties or to demand an outright payment in exchange for waiver of any claim by exerting massive legal pressure on the victim.
Digitalisation has changed the troll business model to the extent that, in addition to traditional patents needed to produce products, trolls can now use other types of copyrighted works as bases for their demands or grounds for lawsuits – such as images, films, music or IT software. The endless possibilities of the Internet makes it possible for trolls to now take action against anyone, anytime, anywhere. Targets range from major international corporations to individual platform accounts. Trolls need only to accuse the victim of having infringed upon existing copyrights and this triggers an often highly complex or at the very least costly process to clarify the accusations. To avoid this, many victims prefer to pay the toll.
Copyright trolls hoping for payment target those who they suspect are making money. They only have to create a basis for their claim, giving the victim the impression that they are in for a lot of trouble. For example, they bypass security mechanisms created specifically to protect copyrights and then issue complaints about any potential infringements. This was exactly what happened in the United States with the Google image search case: Trolls had uploaded photos in such a way that the control software couldn’t recognize them as protected and then lodged a complaint about this very problem. Or trolls will attempt to sully the reputation of an account operator, accusing them of copyright infringement on their platform, even though the trolls don’t own the photos in question. The victim, although actually in the right, has to respond constantly to accusations and save the site from being shut down, which means they hardly have any time left for core business activities, such as maintaining a successful Internet presence. In a case like this, it may be best to weigh the options and put an end to this damaging behaviour by paying up.
Copyright trolls have the potential to be a threat to any organization because at some level, everything involves copyright. For example, some companies end up as a target based on their advertising and marketing activities or Internet presence because the sources of images or music have not been clearly identified. Open source software has also recently proven to be a major concern. As part of digitalization strategies, companies are increasingly making their products smart (buzzwords: Industry 4.0 and IoT). Software with open source code, which can be further developed by anyone, is increasingly gaining ground as programming costs decrease and communication between the various devices becomes easier. But if a developer – contrary to past practice – achieves legal protection of their contribution to the overall undertaking, they can exert enormous pressure on those who use the software package by integrating it into their products or developing it further. You simply can’t do without the code that you suddenly have to pay licence fees to use. A co-developer of the Linux Netfilter is said to have recently received several million euros as compensation for alleged copyright infringements because users feared a sales ban on affected products.
Company lawyers must raise awareness in all departments about the methods of attack used by copyright trolls. In marketing, for example, it must be clearly established that no photo or music snippet may be used until the source has been clarified and the right to publish has been obtained. And programmers working with open source software have to run each piece of code through a sophisticated clearing process before integrating it into products. Disseminating information and defining well-designed processes to detect problems cannot completely prevent troll attacks, but they can at least reduce their frequency and chances of success.
Don’t ever take an attack by a copyright troll lightly. And doing nothing is not an option. Any accusation of copyright infringement must be investigated immediately – the specialist department must provide the facts and the legal department must confirm the legal classification of those facts. In some cases, it may just be a matter of deleting images from an Internet platform that allegedly infringe the copyrights of third parties. This often happens automatically after complaints of this kind are filed – but if you do not take action against a threat, you cannot prevent it from materialising. Some attacks involve a direct claim for royalties or damages from the outset. These are often associated with deadlines. Waiting too long to take action can weaken the company’s position, no matter how unjustified the claims initially appear to be. It is also important to take a rigorous approach based on the facts and only compromise in exceptional cases if the claims turn out to be partially justified. To deter trolls, the legal department should make it as uncomfortable as possible for them to perform their “handiwork”. This is especially true when dealing with trolls who don’t want to extort money, but simply stir up trouble.