What is a patent troll?

pat·ent (noun), a writing securing for a term of years

the exclusive right to make, use, or sell an invention

troll (noun), a dwarf or giant in Scandinavian

folklore inhabiting caves or hills

Merriam-Webster Dictionary

While patents have existed for centuries and stories about trolls have been scaring little children for millennia, patent trolls started to enter public consciousness only in the past decade.  A patent troll is a company that 1) amasses intellectual property capital primarily by purchasing patents as opposed to having its employees create original inventions 2) demonstrates little to no desire to deliver products or services based on the intellectual capital and 3) aggressively pursues licensing agreements with companies that the patent troll alleges to be infringing on its intellectual property monopoly rights.  In other words, a patent troll buys patents on the cheap and sells expensive licensing rights, primarily to companies that are unlikely to fight a patent infringement lawsuit in court.

Peter Detkin, a former attorney for Intel Corp., used to call these companies “patent extortionists”.  Following a libel lawsuit, Detkin resorted to coining the epithet “patent troll” [1] which came to define an industry profiting from more than $29 billion in costs to the United States economy. A typical target of a patent troll is a small to medium size business with yearly revenues of close to $10 million [2] and potential to give up a few hundred thousand dollars in patent licensing fees.

The patent troll problem is now large enough that US federal government is interested in taking action. Congress, the White House and the Federal Trade Commission have started taking about policy changes [3] but as usual it will take years for the government to get anything done and even then laws will have to be interpreted and debated in courts before they are a part of intellectual property attorney’s defensive playbook. In the meantime, Main Street companies like  restaurants, hotels and department stores are becoming targets of patent infringement lawsuits over something as simple as hosting a guest WiFi [4].

Seems unfair? Many agree. Kevin O’Connor, a founder of DoubleClick prepared a guide on fighting trolls [5].  Todd Moore of TMSOFT explained why paying a troll is a bad idea [6]. Joel Spolsky of Fog Creek Software used his extremely successful StackOverflow site to create a community focused on finding prior art to overturn bad patents [7].

Patent trolls are bad for innovation and are bad for US economy. That’s why our team is preparing to launch FightTheTroll.com to help companies band together and act collectively against patent trolls.

Join us. Sign up for an invitation to a private beta at fightthetroll.com

Sources

[1] Brenda Sandburg (July 30, 2001). “You may not have a choice; Trolling for Dollars”. The Recorder.

[2] Bessen, James E. and Meurer, Michael J  (June 28, 2012). The Direct Costs from NPE Disputes. Boston Univ. School of Law, Law and Economics Research Paper No. 12-34

[3] Michelle Quinn (July 27, 2013). “Technology industry taking aim at patent trolls”. Politico.

[4] Gregory Thomas (September, 2011). Innovatio’s Infringement Suit Rampage Expands To Corporate Hotels. The Patent Examiner: UC Berkeley Investigative Reporting Project.

[5] Kevin O’Connor (July 26th, 2013). How to slaughter a patent troll in 5 steps. PandoDaily.

[6] Todd Moore (July 2, 2013). Why I’m not paying the Troll Toll. My Random Tech Blog.

[7] Joel Spolsky (April 2, 2013). The Patent Protection Racket. Joel On Software Blog.

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