If you have important intellectual property, you have probably heard of patent trolls or patent trolling. Patent trolls are costly drains on businesses, and patent trolling is difficult to eradicate. Patent trolls buy up broad patents for common sense inventions or less-than-novel technologies and then prosecute anyone potentially infringing on that patent. While this may seem ridiculous, it is a reality that small businesses and startups regularly face.
If you have become a target of a patent troll, it may seem hopeless to try and fight the accusations, but you still have options. Contact a patent lawyer right away to find out if the lawsuit has any merit and decide if you have the means to stop the patent troll from draining your profits. You can connect on-demand with experienced intellectual property litigators through Priori’s vetted marketplace.
What Is A Patent Troll?
Patents are intended to be useful devices to encourage innovation in the long run by giving inventors limited monopolies on the use and manufacture of their new inventions and discoveries for a limited period of time. Patent trolls take advantage of this system by obtaining overly broad patents and using them not to sell, manufacture or even develop, the invention, but rather to simply sue other companies for infringing on the patent. Companies that employ this business model are known as patent assertion entities. In technology fields, the behavior of patent assertion entities can be especially damaging, as patent trolls can lay claim to a large percentage of derivative technologies.
How Patent Trolls Make Money
Patent trolls generally don’t expect all the lawsuits they threaten to stick. Rather, they send demand letters with just enough merit that the target company feels that the lawsuit could potentially go to court. Then the patent trolls typically offer a settlement or the option of paying an exorbitantly large licensing fee for the technology. Patent trolls know that fighting the infringement charges will cost the company much more than the settlement they offer, so they hope to make money off of the threat of legal action alone.
Why Should I Care About Patent Trolling?
If you have a startup, own a small business, or even simply want to promote the growth of the U.S. economy, you should care about patent trolling. Patent trolls hurt innovation by punishing companies successfully creating profitable inventions and investing in research and development.
Even worse, patent litigation brought by patent trolls is on the rise. In fact, about 74 percent of startups have experienced “significant impacts” from the demands made by patent trolls, and 41 percent have actually had to change their business model or fold entirely. This hurts everyone, whether you are a business owner, an investor, or simply a consumer.
Patent Trolls & Legal Reform
Due to the incredible damage that stems from patent trolling, the U.S. Congress is currently debating several key pieces of legislation designed to crack down on patent assertion entities. Legislators hope that these reforms would curb abuse of the patent system by patent trolls by making it more difficult to bring illegitimate suits and requiring the accusing party to pay for legal costs if the lawsuit is determined to have no merit.
Some progress has already been made, but there is still a ways to go. The United States Patent and Trademark Office has been tightening its requirements on the specificity of patents, which helps prevent patent assertion entities from filing broad patents that can lead to lawsuits against many different companies. This office has also removed protection for some overly broad patents that had been used by patent trolls.
The cost of defending against a patent troll can vary significantly, depending on a variety of factors. Priori lawyers can guide you through the process at rates of approximately $225 to $600 per hour. Priori clients enjoy a net-15% discount on standard hourly rates. In order to get a better sense of cost for your particular situation, put in a request to schedule a complimentary consultation and receive a free price quote from one of our lawyers.
What should I do if I am being sued by a patent troll?
Even if you think that the lawsuit brought by a patent troll is without merit, you should take threats from patent trolls seriously. Talk over the specifics with a patent attorney right away to learn about the best actions to take.
Will the PATENT Act and the Innovation Act help get rid of patent trolls?
These acts are designed specifically for that purpose. The two acts propose four sweeping reforms targeting patent trolls:
- They would raise the pleading requirements for the complaint in patent infringement cases, making it harder for patent trolls to bring unsubstantiated cases.
- They would minimize discovery costs associated with patent infringement cases, decreasing the cost of fighting patent trolls in court.
- They would protect end users from legislation involving the manufacturer accused of infringement until the case is over, so that patent trolls could not go after as many companies.
- They would ease fee shifting requirements if the case is determined to be without merit, meaning that patent trolls would be responsible for the costs of unsuccessful lawsuits.