What Is Patent Troll Litigation?
Patent troll litigation is where business acquire patents not through inventorship and without the intent to use these patents, and then bring lawsuits or demands against other companies to force settlements or obtain licensing fees.
***
Background
Patents are a powerful form of intellectual property that protect inventorship and innovations for new and useful ideas. They grant in the patent holder for twenty years the exclusive right to exclude others from making, using, selling, offering for sale, or importing the patented invention. This incentives innovation by allowing individuals or businesses to reap the rewards of their inventions without risk of a competitor more successfully marketing their idea. However, not every patent holder seeks to protect their idea, but rather, abuses the system by taking advantage of the threat of costly litigation.
Patent Trolls
Patent trolls are those nefarious parties who acquire patents in mass and then find just colorable enough clams to assert infringement actions against unwary parties selling somewhat related products. Typically, they will send a demand letter seeking payment or recurring licensing fees and threating litigation if the accused party does not comply. Given the immense cost associated with defending a patent litigation lawsuit, this can be a serious concern. Often, even where the patent troll’s claim is essentially baseless, it is nevertheless cheaper just to pay them to go away rather than defend a potential suit.
Regulation
Unsurprisingly, the government and courts strongly disfavor the practice of patent trolling. In cases where a patent enforcement suit is found to be frivolous, the standards for the innocent, accused party to recover its costs in defending the suit should it win are relaxed. Further, in egregious cases, courts may award punitive damages requiring the patent troll to pay greatly enhanced damages. Likewise, some states have enacted anti-trolling legislation in efforts to combat this harmful practice, authoring the government to act against bad faith patent asserters.
When dealing with lackluster infringement allegations, it is important to consult with experienced and qualified counsel who can help your business navigate this frustrating process. Properly navigating the situation could mean avoiding catastrophic expense.
For more information on patents and intellectual property in general, see our patent services and intellectual property practices pages.
Klemchuk PLLC is a leading IP law firm based in Dallas, Texas, focusing on litigation, anti-counterfeiting, trademarks, patents, and business law. Our experienced attorneys assist clients in safeguarding innovation and expanding market share through strategic investments in intellectual property.
This article is provided for informational purposes only and does not constitute legal advice. For guidance on specific legal matters under federal, state, or local laws, please consult with our IP Lawyers.
© 2024 Klemchuk PLLC | Explore our services