Written by Tim Mount on 27 September 2008« Return to Reading Room
Patent trolls are companies or individuals who possess patents, perhaps many, and sit on these patents waiting (perhaps under a bridge) to aggressively pursue others for infringement. A less pejorative term is Non Practising Entities (NPE). These patent owners do not use (i.e. licence or assign) or manufacture on the basis of their patents or patent portfolio. Many instead see patent ownership as a means of hijacking another’s success in their field, with minimal effort or expense.
Bankrupt technology firms frequently auction off their patent portfolio. Patent trolls may therefore have purchased the patent from a defunct company, or perhaps from an inventor in need of money. These parties have no manufacturing or research base, no intention to use the patents, and only seek to enforce their Intellectual Property Rights once another company or individual has independently come to the technology, and have committed themselves to the enterprise.
The goal of a patent troll (or it may be argued, a patent ‘dealer’) is typically to licence their patent to the alleged infringer. This after-the-fact licensing involves large money for the troll, for no contribution to the field. It has however been argued that ‘patent dealers’ support and encourage the patent system (and therefore innovation) by encouraging use of the patent process.
Infringement actions reaching court are relatively rare as most alleged infringers will prefer to settle before court as costs can be high. More aggressive litigators may seek to invalidate the troll’s patent, perhaps by seeking out prior art to destroy the troll’s claim to a monopoly.
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