State AG counterplan - patent troll cases proves it works

Another event that could stifle the development of trademark trolls is the possibility that state attorneys general will also sue trademark trolls for sending abusive cease-and-desist letters, as has happened with patent trolls.260 Moreover, the FTC recently entered a settlement agreement with a patent troll. The possibility that the FTC may bring an action against trademark trolls may lessen the likelihood that a problem with trademark trolls will develop. The Vermont, Nebraska, and Minnesota Attorneys General have brought suit against patent trolls for the abusive efforts of patent trolls.261 Moreover, the Vermont Legislature passed a law that is specifically targeted at patent trolls.262 The law prohibits “bad faith assertions” of patents.263 The determination of what is bad faith depends on an analysis of various factors, including a failure to include specific information such as specific factual allegations concerning infringement, a failure “to conduct an analysis comparing claims,” whether the claim is meritless or deceptive, and whether the entity asserting the patent has been successful in prior litigation.264 Section 4199 of the legislation provides for attorney fees, costs, and “exemplary damages in an amount equal to $50,000.00 or three times the total of damages, costs, and fees, whichever is greater.”265 Vermont has brought at least one suit against a well-known patent troll under its general consumer protection laws.266 Recently, the FTC reached a settlement agreement with a well-known patent troll.267 Notably, future deceptive conduct will result in relatively substantial fines.268 The use of consumer protection laws, as well as tailored laws, may deter trademark trolls and will certainly influence the behavior of potential trolls.269 7. The Federal Circuit and Uniformity as the Root of Trolls At least one commentator has argued that the Federal Circuit and its case law are essentially responsible for the patent troll problem.270 Other commentators have criticized the Federal Circuit for its supposedly pro-patent approach and argued that the Federal Circuit should share jurisdiction over patent appeals with the other regional circuits.271 Thus, the Federal Circuit’s influence over patent law would be reduced, and the Supreme Court would benefit from having other viewpoints concerning patent law from the circuit courts of appeal.272 Notably, the Supreme Court has heard a number of appeals from the Federal Circuit concerning patent law and has overturned the Federal Circuit numerous times.273 Some of the potential downsides to removing the Federal Circuit’s exclusive jurisdiction over patent appeals would include having a less uniform nationwide patent law274 and the existence of extensive forum shopping. To the extent that the Federal Circuit is responsible for the patent troll phenomena, trademark law should be less susceptible to the development of the same problem because the Federal Circuit shares jurisdiction over trademark appeals275 with the other federal circuit courts of appeal.276 Thus, the problems associated with capture by an interested group277—such as trademark lawyers—are less likely and the Supreme Court is able to get various views from the other circuit courts of appeal concerning trademark issues. Moreover, state courts hear trademark cases as well. Notably, many argue that trademark law has continued to expand; however, some circuit courts of appeal have applied doctrines such as nominative fair use and other doctrines to protect competition and First Amendment values.278 Thus, the nature and structure of the appellate system and development of trademark law could make it less likely that a trademark troll problem could develop similar to the patent troll situation.