Trademark abuse

He Says He Owns the Word 'Stealth' (Actually, He Claims 'Chutzpah,' Too) (By COLIN MOYNIHAN, Published: July 4, 2005, NYTIMES.COM)

This is the story of a man who is making a living through enforcing trademarks he owns, including on the word 'Stealth'. So much so that he claims to own the word 'Stealth', and several other words.

My opinion is he's abusing the trademark system, and nobody is having enough chutzpah to challenge him in a way that would put a stop to it, so he's able to continue on getting money from settlements that the companies involved see as a payment to make him go away.

Mr. Stoller said he first registered "stealth" as a trademark in 1985 to cover an array of sporting goods. But in recent years, "stealth" has become widely used in marketing and branding circles to bestow a sense of the subliminal or the subversive or to convey an aura of lurking power.

Since then he tried several other lines of products, getting a 'stealth' trademark on each one. In total he owns dozens of distinct trademarks using the word 'stealth'. Lumping them all together is how he has the pretension to claim ownership of the word. Each individual trademark applies to one product area, but when you own dozens of trademarks each covering different product areas, then you begin to control the word more widely.

For example he's probably never made a movie, but he is currently suing Sony Pictures over a movie they're releasing this summer to be named 'Stealth'. And the fact that he's never sold airplanes under the title 'Stealth' didn't stop him from suing Northrup Grumman over the Stealth Bomber.

And it's not just the word 'Stealth', but several others including 'Chutzpah'.

Another way of looking at Mr. Stoller is that he's a failure at business, and that he latched onto abusing the trademark system.

But what really has me riled is the effect on other companies. Basically his activities represent a disincentive to other companies to create and sell products, because if they make a product that runs afoul of his trademarks, trademarks for which he has no product currently on the market, then they're liabel for either licensing fees or damages, and in any case they have to keep lawyers on staff to deal with the hassles.

Oh, and it's not just Mr. Stoller with his trademarks, but there's several other companies out there doing the same thing. The most infamous perhaps being the SCO case versus IBM, Linux, and other Unix vendors where a group of "investors" with a history of patent and trademark lawsuits bought SCO thinking they would then own Unix and be able to launch sweeping lawsuits against Unix and Linux vendors who seemed to be infringing on patents related to Unix.

A specific point in Mr. Stoller's case is that he doesn't currently have products on the market using the Stealth trademark. It sounds like, once you have the trademark, it remains in force probably so long as you keep filing the paperwork with the Patent and Trademark office. But, this seems backwards.

Trademarks ought to be used to protect merchants who are actively engaged in trade. If they no longer actively engage in trade, that is selling a product that uses the trademark, the trademark ought to automatically expire.

Hmmm....

Maintaining a federal trademark registration (uspto.gov) says

Rights in a federally-registered trademark can last indefinitely if the owner continues to use the mark on or in connection with the goods and/or services in the registration and files all necessary documentation in the USPTO at the appropriate times.

and generally must periodically file certain forms. So it seems that trademarks do generally work as I'm expecting, but there must be some detail that is being abused here.

Here's an example of how I think the abuse might be happening ... There's dozens of OEM manufacturers who are willing to make a product and put any label on it you want. This would make it trivial to go to one of those companies and have them make a product that fits the trademark you own. There's a minimum order of, say, 1000 units ... e.g. however many units will fit in a single shipping container from China. You then order that minimum order, stick the products in a warehouse, probably at a shipping fulfillment company, and then make some kind of attempt to market the product. After some time you can give up and declare a loss, writing off the products. But in the meantime you've reinforced your claim on the trademark.

There seems to be something wrong here. Mr. Stoller reminds me of a leach, sucking the lifeblood out of others. I wonder what success he could make if he turned his obvious intelligence and talent to productive ends?