Copyright Trolls

A copyright troll is a party that enforces copyrights it holds for purposes of making money through litigation, in a manner considered unduly aggressive or opportunistic, and generally, without producing or licensing the works it owns for paid distribution. In the fashion industry, this is most commonly seen in a rising number of lawsuits stemming from copyrighted fabrics and prints, which have been subject to intellectual property protections for more than 60 years.

Like patent trolls, copyright trolls depend on the ability to “cheaply cast a very wide net, sending out hundreds or thousands of accusatory letters at once,” seeking license fees from the parties that are allegedly infringing the copyright at issue. (CNET). The copyright trolls receive settlement payments back from some percentage of these parties without having to initiate a lawsuit or go to court.

In order to receive payment from the others, however, the copyright trolls may have to file copyright infringement lawsuits. Because “U.S. copyright law allows for copyright claims to target all parties involved in the production and sales process, from retailers to labels to textile manufacturers,” copyright trolls may name each of these parties in its complaint, and as a result, they ultimately stand to collection millions of dollars from a small amount of misappropriated patterns. (Fortune).

Example: Fabric Manufacturing Companies

An example of the practice of copyright trolls in the fashion industry involves  copyrighted fabric designs. Although copyrights cannot be claimed in garments in their entirety (as garments are utilitarian articles and thereby, only “separable” elements may be protected), they can be claimed in original fabric designs. “Due to the nature of the clothing industry, where clothing designs are often being copied before the model leaves the runway show, designs are copied by third parties and crafted into new garments with little thought to intellectual property protection. Some legitimate design houses and many lesser-known fabric mills have begun registering copyrights in fabric designs. Once copies of the designs are seen for resale at trade shows or on the Internet, a demand letter is issued to the copier, setting forth a formula to settle the claim.” (Law360).

Copyright Trolls vs. Patent Trolls

The term “troll” was initially coined to identify patent investment companies or “non-practicing entities” (as distinct from companies that utilize the patents in the goods/services that they offer) that buy many broad, vague and questionable patents and enforce such patent right to demand license fees from companies.

“When numerous copyright suits began to be filed seeking similar licenses, the reference to trolls was quickly applied.” (Law360). However, as distinct from patent trolls, the key element for copyright trolls is on the frequency with which such parties file lawsuits, and not on whether the party that has initiated the lawsuit is a practicing entity or not.