What Is A Patent Troll?

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What Is A Patent Troll? 

Definition

The word patent troll is used to describe corporations or individuals that misuse patents as a business strategy. It gets the patents being sold at auctions by bankrupt entities that try to liquidate their assets or by carrying out enough research as proof that they had the idea first. The trolls can file lawsuits against infringing companies or just hold the patent without trying to practice the idea or innovation to keep their firm’s productivity at a standstill.

Patent trolls don’t try to manufacture products or supply serves based on the patents in question. Nonetheless, some entities that don’t practice their asserted patents might not be put into consideration more so when they license their patented technologies on practical terms in advance

Among the other related terms include patent assertion entity, patent withholding entity, or non-practicing entity all of which might not be termed a patent troll depending on the position they are taking and the perception of the position by the public.

Cause and Prevalence of Patent Trolling

Patent trolling has traditionally been more prevalent in the US than in Europe. The difference in the levels of trolling between the US and Europe is primarily due to the different legal systems.. In Europe, the legal system requires the loser to pay for all the legal costs incurred in the suit. Until 2014, in the US, each party was responsible for paying its own legal costs. The potentially high cost in Europe was thus a key deterrent to potential companies that engage in patent trolling.

The high costs of litigation in the US, often running into millions of dollars, more often means that corporations are often willing to settle legal suits for hundreds of thousands of dollars even when the suit is frivolous because it is cheaper than the cost of fighting the suit in court. This conundrum then feeds the patent trolls and encourages more to file similar lawsuits.

Patent trolls tend o engage lawyers on a non-recovery, no fee arrangement ensuring that their downside is limited, but the potential upside is very high. An arrangement like this one makes it difficult for companies to defend themselves against the trolls because they cannot use the high cost of litigation as a deterrent to frivolous claims.

Consequences of Patent Trolling in the US

According to the School of Law at Santa Clara University, in 2012, lawsuits by patent trolling companies accounted for 61% of all patent related cases in the US. A June 2012 BBC report claimed that Patent trolls cost use organizations $29Billion in 2011. According to an article by John Paczkowski, for the five years beginning 2009, technology companies were the hardest hit by patent trolls with Apple Inc., HP, Samsung, AT&T and Dell having a combined total of 680 lawsuits from patent trolls.

To combat the trolls, the License on Transfer (LoT) network was established to pool patents which would be cross-licensed in the event of a triggering event. A triggering event could arise, for example, if a patent falls to an entity that is not in the LoT network or when a LoT member either became a patent troll or was absorbed by one.