Dealing With Patent Trolls In IP Litigation

| Mar 23, 2021 | Intellectual Property |

In the fast and furious world of Intellectual Property (IP), the looming shadow of the patent troll is enough to halt innovation in any number of fields–technology, pharmaceuticals, clean energy. Small businesses fear they don’t stand a chance when a patent troll raises its ugly head. Conventional wisdom is that patent trolls exist to steal from honest innovators, demanding payment for the use of the entrepreneur’s ideas.

What exactly is a patent troll?

There is a misconception that a patent troll doesn’t own the patents they demand payment for. A patent troll does own the patent, but they are not actively using the idea or technology. According to Peter Detkin of Intel, the man who coined the term in the 1990s, this describes “somebody who asserts a patent broadly, for nuisance value with a meritless claim.”

The current definition of a patent troll is an entity that collects patents–usually novel technologies–with no intent to further develop them or introduce them into the marketplace; they are simply a holding pen for intellectual property. The business model for the patent troll–usually a business, not an individual–is to buy the patent from a cash-strapped company, and in turn, generate revenue from a firm that “engages in activities arguably falling within the scope of the patent.”

This fairly narrow definition has expanded towards negative connotations, to the point that the phrase “patent troll” is considered an insult and cannot be used in litigation.

How to fight back

Recent legislation makes it easier to beat back a troll’s demands. Until recently, trolls liked to file lawsuits in Texas, where judges tended to rule in their favor. The US Supreme Court stopped this forum shopping in 2015 (TCHeartland v Kraft), and the application of Prior Art (some evidence somewhere that parts of the patent in question were already known) takes away the foundation of a troll’s case.

No business wants to spend time and money in litigation, but when a patent troll starts sending cease and desist letters, it’s time to consult a patent attorney. In these cases, there’s usually the demand for a substantial sum attached to the letter, threatening litigation if the patent infringer doesn’t pay for the use of the patent.

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