That seems awfully harsh. And I'm not sure if I believe that story or not. I used to own a trademark, principle, not service mark. The law is that if you do not defend it, you can lose it, if the USPTO finds out about it. So, there were a bunch of competitors who decided it would be profitable to use my mark. I sent them cease and desist letters myself. And they did. And I didn't sue anyone. My lawyer said to defend it would cost a minimum of 20K and the venue had to be where the person lived that infringed.
Coca Cola got after a bunch of gel candlemakers for using their glasses at one point, but they just told them to stop and no one got sued by them. Usually people just want you to stop doing it. Suing some small time person like that is ridiculous, but if they win, they could ruin someone financially.
Hope it's not true.