Following the precedent of the 7th circuit court allows for the canceling of trademarks which solves trademark trolls

Known for his role as an intellectual property “entrepreneur”1 , Mr. Leo Stoller is the prototypical trademark troll.2 Stoller has made it his business to sue as many parties as possible for the use of “his” STEALTH trademark.3 One court recently described Stoller as “running an industry that produces often spurious, vexatious, and harassing federal litigation.”4 The problem with Mr. Stoller is that the intellectual property community and the courts doubt whether Stoller actually uses the STEALTH mark on actual goods sold in commerce.5 Rather, he merely exploits his trademark registrations to negotiate and extract licensing fees from companies using the mark on their own products.6 Some of those third parties, when threatened with litigation, have entered into licensing or settlement agreements for use of the STEALTH mark. These agreements cover a startling collection of products, ranging from “hand tools to make prosthetic limbs to construction consulting services to track lighting.”7 It was reported that Stoller even accused Sony Pictures of infringing the STEALTH mark by including the word as the title of a film featuring Navy pilots.8 Although Stoller purports to have been hired to serve as a trademark expert at various trademark trials throughout the country,9 his situation exemplifies a common misunderstanding that exists among the public, legal practitioners, and even district courts. The mere federal registration of a mark does not give the trademark owner a monopoly over that mark; as the Seventh Circuit has noted, “bare registration is not enough.”10 Under the Lanham Trademark Act, a trademark owner must use the mark in commerce to acquire and maintain ownership rights in that mark.11 This requirement operates to prevent the “banking” or “warehousing” of marks.12 Warehousing is a term used to describe the practice of a party that registers trademarks and effectively collects and stores them as opposed to actually using them. This type of activity is barred both under the Lanham Act and at common law. One cannot register a trademark, cease using the mark on ones’ products and/or services, and then attempt to extract a licensing fee from sellers of products or services well-suited to adopt that trademark.13 This type of operation was, and continues to be, Stoller’s modus operandi.14 Stoller or one of his corporate entities have been involved in at least 49 cases in the Northern District of Illinois alone and at least 47 of them purport to involve trademark infringement.15 Tellingly, no court has ever found infringement of any trademark allegedly held by Stoller or his related companies in any reported opinion.16 Although one would think that these staggering statistics alone would deter Stoller, this apparently has not been the case. In fact, Stoller’s cases have generally “proven so frivolous and wasteful of court resources” that in his most recent action, the Northern District of Illinois enjoined him from filing any new civil action in the district courts without first obtaining the court’s permission.17 In Central Manufacturing, Inc. v. Brett, the Seventh Circuit affirmed a decision of the Northern District of Illinois in which the court utilized two important weapons to counter Stoller’s most recent meritless trademark infringement suit: the power to order the cancellation of a trademark registration and the power to award attorney’s fees and costs to the prevailing party.18 Not only did the Seventh Circuit approve of the district courts decision to cancel the plaintiff’s mark, the court stated that “where . . . a registrant’s asserted rights to a mark are shown to be invalid, cancellation is not merely appropriate, it is the best course.”19 If the approach taken by the Seventh Circuit is implemented more often by district courts throughout the country, trademark trolls such as Stoller may think twice about bringing suit for infringement of a mark in which no protectable rights exist.