This paid piece is sponsored by Woods Fuller Shultz & Smith P.C.

By Carey A. Miller, business and intellectual property attorney

You may be lucky enough that you are thinking of Poppy, Branch or any of the other happy-go-lucky characters from the Trolls movie.  Unfortunately, this is a warning about a far from pleasant experience.  We are talking about trolls who threaten your company or organization with litigation related to copyrights, patents and website accessibility.

Imagine one of these scenarios:   You open your mail to find a letter from an attorney stating that:

• Your website violates the Americans with Disabilities Act (ADA), and demandingyou make your website accessible and pay them a lump sum of money; or
• Your business has been using a patented process, and demanding you make a large payment or pay an annual licensing fee; or
• Your website has used a copyrighted image without authorization, and demanding you pay a licensing fee.

In each case, there is a threat that if your company doesn’t pay, it will be sued.   Any of these could be a scary.   Unfortunately, these scenarios are becoming more common – particularly for small and mid-sized businesses.

There are some law practices which make it their business to profit off of technicalities within the law.  For example, a few firms in particular have become well-known for sending out hundreds, if not thousands, of form letters to retailers, hotels, banks, restaurants, and other organizations that conduct business online, alleging that their websites are not meeting “accessibility standards” under the ADA.

Similarly, when patent trolls set their sights on a group of companies, their law firms send notices accusing the companies of violating some obscure patent.   Usually the claim is that the company has infringed a patent by doing something routine, like by using technology that came already built in to its copier, or simply by attaching scanned documents to emails. One patent troll filed more than 500 lawsuits for patent infringement over package tracking. In some cases, they sued companies simply for emailing package tracking numbers to their customers.

Copyright trolls use sophisticated internet searches to identify when copyrighted photos or images have been on a company’s websites, even if the photo or image appeared for just a time.   Copyright trolls will then contact the company about the unauthorized use of the photo or image, explaining that it is copyright infringement.  Unfortunately, the company contacted often has no idea that the photo or image was subject to copyright protection, having obtained it from a website where it appeared to be part of the public domain.  Trolls do not use their technology to police the sites where unsuspecting companies find the photos or images.

What characterizes trolls is that they are typically after a nuisance-value settlement, or ‘go away’ money. Typically, the troll will threaten a series of lawsuits against several defendants alleging violation of a patent, copyright infringement, or website accessibility issues under the ADA. Their lawyer will demand a payment of thousands of dollars in order to settle the case.   Their business model involves settling as many of these cases for as much money as they can.

For many years, these entities made their money threatening to sue (or actually suing) large corporations. Companies could be sued anywhere they did business, and large companies with multi-state locations were a prime target for patent trolls. But in May of 2017, the Supreme Court issued a ruling that companies could only be sued for patent infringement in the state where they reside. This made small businesses a new target for trolls. Small companies and startups look at the cost of defending a lawsuit as a much bigger threat, so attorneys began sending letters containing a simple proposition, pay us and we’ll drop our planned lawsuit.

For many small companies, it seems easier to say yes and make the problem go away. The trolls are generally willing to negotiate down to a fraction of their original demands, and litigation is not only expensive, but time consuming. This is the exact calculation the trolls are hoping for.   And, under some circumstances, it may be the best result for the small company.

So, what should you do if your company finds itself faced with a demand for payment or the threat of these types of litigation?

• Don’t Panic. Being threatened with a lawsuit can be alarming, but a business should keep in mind that the threat of a lawsuit may not lead to an actual lawsuit.
• Evaluate the Threat.  You can and should take a little time to determine how serious the threat is. Seeking advice and counsel to evaluate the threat is well advised.  Experienced counsel can quickly identify trolls and may have resolved similar claims.
• Consider Your Alternatives. Attorneys who have handled these types of threats are your best resource in determining your course of action.   Your business must evaluate if settlement makes sense under the circumstances?   In the case of website accessibility, you also have the ability to be proactive. Web Content Accessibility Guidelines (WCAG) exist, and there are many free tools available to run an ADA audit on your website.

If you have questions about whether your company has encountered a troll or is facing more serious litigation, please contact Woods Fuller attorneys Carey Miller, Sander Morehead or Joel Engel or visit www.woodsfuller.com.

Website accessibility: Is your business at risk?