04/27/2023
Watch Out for Business Trolls
Your business can be in a legal quagmire even if you think you are doing everything by the books. This is because settling a potential lawsuit is usually more cost-effective than litigating one. With this knowledge, unscrupulous law firms use the threat of lawsuits as a business strategy and are often known as legal trolls. Here is what you need to know.
Here Come the Trolls
A number of companies are in business primarily to extract a fee from unsuspecting businesses that happen to unwittingly come across their path - just like trolls. Here are some of the more popular strategies being used today.
Patent and copyright trolls.
A number of companies are in the business of acquiring patents and copyrights with little to no intention of using them. They monetize their purchases by catching others they deem are violating their use. This can include inventions or be as simple as a similar design or process! You either litigate or pay ongoing license fees to make them go away.
Consolidator trolls.
A person or a group will buy up a business category, change the licensing of product use, then go after those using a product or service that are not in compliance. A good example of this is the licensing of photos, video clips and audio files. As a small business owner, you could find yourself addressing a threat of a lawsuit because you are using an image to which you purchased the rights many years ago.
Website trolls.
One day you may receive a letter stating that your website violates the Americans with Disabilities Act. The letter may demand a large payment in order to settle the case.
ADA physical compliance trolls. These law firms will hire someone to enter every retail establishment and find violations. A ramp with an angle that is off a bit, or a railing too high or too low, opens the door to legal action, often without the ability to correct the problem ahead of time.
What you can do
Here are some ideas for dealing with these trolls to get them to disappear for good:
Take action.
Do not ignore the complaint. Contact your insurance company and legal representative as soon as you are threatened. Remember, if you decide to pay even a small fee to make the problem disappear, you may open yourself up for the troll to look for other instances to extract additional payments from you.
Get good insurance.
A good small business insurance policy can help defend you if someone threatens you or your firm. Often when the litigator realizes you will not be out-of-pocket to defend yourself, they will back off on their claim.
Get the help of an expert.
Review your legal threat with a law firm experienced with these legal sharks. They will often know the right legal approach to send them on their way.
Tell others.
Let fellow vendors and competitors know that the trolls are out there and that they are attacking when you are threatened. Share information with them on how you made the problem go away.
File complaints.
If the threat of a lawsuit is frivolous, state and federal authorities should be made aware of the company's threatening practices
Source: Tax Services of Hawaii Newsletter
