The Problem with Patent Trolls

Recently several of my articles have been critical against patent trolls. This is not something new for me, I have been critical of patent trolls for quite some time. Over the years I have also been very supportive of patent owners having the right to bring patent infringement lawsuits to enforce rights that have been granted in the patent; after all, if you cannot enforce a right is it really a right? I think not. This has lead me to at times champion the patent grant and oppose any watering down of the rights of patent owners, as was contemplated in years past with previous versions of patent reform.

For some my pro-patentee and anti-patent troll positions have been difficult to reconcile. I have been contacted privately by some who have urged me to tone down my use of the term patent troll, and that is a fair point. After initially resisting using the term for a great while I embraced its usage years ago, back when earlier versions of patent reform were seeking to curtail the right of a patent owner to obtain due compensation (in the form of damages) for infringement by a defendant. Periodically the Supreme Court has even raised the issue of patent trolls in a casual manner as justification for one bad ruling or another. Typically most use the term “patent troll” to refer to non-practicing entity, but doing that is simply absurd. So I turned to embracing the term. Does it feel right to call a university a patent troll? I think not, and I think most would agree. So not all non-practicing entities can be patent trolls, can they? See how the usage of the term starts to really crystallize the issues?

Lately Lodsys, LLC, has been in the news a lot because of their patent infringement lawsuits against Apple App Developers, Android App developers and others. See Angry Birds Developer Sued by Patent Troll.  But is Lodsys a patent troll?

Another company in the news with some frequency, and with a far larger patent portfolio than Lodsys, is InterDigital.  They recently filed a complaint against Nokia, Huawei and ZTE at the ITC, alleging patent infringement of seven different patents.  That is more patents than are owned by Lodsys.  In fact, according to the InterDigital Amended 10-K filed with the Securities and Exchange Commission, as of December 31, 2010, InterDigital owned a patent portfolio consisting of approximately 1,300 U.S. patents and approximately 7,500 non-U.S. patents. InterDigital also reported that as of December 31, 2010, the company had approximately 1,200 pending applications in the U.S. and approximately 8,500 pending non-U.S. patent applications. These InterDigital patents and pending patent applications relate to a variety of digital wireless radiotelephony technologies, including 2G, 3G and 4G technologies.  Is InterDigital a patent troll?

It is certainly true that a patent gives you the right to stop others from engaging in activities that infringe, and it is legal to purchase a patent and seek to enforce the patent whether you are a practicing entity or not. For this reason I typically go one step further when defining a patent troll. To me a patent troll is not just someone who has acquired a patent for purpose of licensing or bringing a lawsuit, but rather one who is engaging in some kind of unfair business practice. The truly bad actors that are the ones who should rightly be called patent trolls are the patent owners that do no due diligence prior to filing a lawsuit to determine if there is, in fact, ongoing patent infringement. The bad actors are also increasingly looking to shake down small businesses by bringing specious patent infringement lawsuits knowing that it will be far cheaper for the defendants to settle with a licensing fee than it will be to litigate, even if there is clearly no infringement.

The telltale sign of a patent troll is one who is abusing the patent right in order to shake down a defendant for payment. This type of behavior is typically exhibited by non-practicing entities who are not innovators, but rather acquire patent rights. However, the act of bringing specious claims to provoke a settlement would, in my opinion, be just as bad if brought by an innovator.

Based on this understanding of the term “patent troll,” it seems to me that Lodsys is correctly characterized as a patent troll, or at least as one exhibiting signs and symptoms of being a patent troll.  They acquired these patents from Intellectual Ventures, who had already licensed Apple, a license Apple claims covers their App Developers, which sounds correct on its face.  This would mean Lodsys is suing at least some, namely the Apple App Developers, who have every right to be doing what they are doing.

On the other hand, InterDigital is not what I would call a patent troll, although some certainly would.  Innovators who legitimately have a grievance and who seek redress in the federal courts simply cannot be characterized as patent trolls, even if they are non-practicing entities.

All non-practicing entities are NOT patent trolls.  If all non-practicing entities were patent trolls that would mean that universities, federal laboratories and R&D companies (i.e., much of the biotechnology industry, for example) would all be patent trolls.  With this in mind I would exclude InterDigital as a patent troll because they engage in research and development to create technologies. The traditional patent troll is one who simply acquires patents for the sake of enforcing them against others, never having contributed anything by way of innovation themselves.

As patent attorney, author and blogger Dale Halling recently put it to me in an e-mail exchange:

I do think patent aggregators could play a positive role. For instance, they could provide a useful outlet for independent inventors who do not want to be part of a large organization (secondary market) or be forced into marketing and management activities… They also could perform the function of a private clearinghouse for patent rights (sort of like a standards committee does). This would reduce litigation, increase the dissemination of new technologies, and decrease the cost of licensing activities.

Dale is correct.  There is nothing inherently wrong with patent aggregators, and the licensing and sale of patent rights does not make one a patent troll any more than does the purchase or acquisition of patent rights from an innovator.  A patent is a right granted for the disclosure of a useful, new and nonobvious innovation.  It is given by the federal government as a reward, and it ought not be up to anyone other than the owner what to do with that property right.  So whenever we attempt to define a patent troll we must look past the acquisition of the right and whether the person owning the right is a non-practicing entity.

Certainly it is fair to observe that the bad actors, who I refer to as patent trolls, are almost always non-practicing entities.  It is also fair to observe that the bad actors are almost never innovators.  But it would be best to use the non-practicing entity and non-innovator factoids as important clues to whether or not the patentee plaintiff is a patent troll.  But without more neither should rightfully lead to a conclusion that one is a bad actor, and therefore a patent troll.

In my e-mail exchange with Dale, which incidentally was in response to NPR citing an IPWatchdog article about Intellectual Ventures, he said: ” I do not think the answer is to weaken our patent system or call people trolls.  In addition, I do not think the story of people walking all over other people’s patent rights is heard often enough.”   This was in response to my saying that the potential for abuse of the IV patent portfolio is what scares me.  I am also troubled by the fact that IV had always said they were building a defensive portfolio, but now are bring patent infringement lawsuits as a plaintiff.  Further, I am troubled by the accusations that IV has outsourced troll-like litigation by dumping patents to entities that then themselves become patent trolls.

There is much still to know, but if IV ever does want to become a patent troll good luck to everyone!  See Intellectual Ventures: Independence Day Take II.  With 30,000+ patents such a decision could be nearly catastrophic for many,who would have no ability to fight back against an extraordinarily well funded non-practicing entity.  Of course, for now, that is really just a fear, or to put it in scientific terms, a hypothesis.  There is some evidence, perhaps not enough to call it a “theory,” but still enough such that the fear is not irrationally baseless.

In any event, returning to Dale’s point, he is 100% correct. All the focus in the media about patent trolls and how patents are being abused is popular but wholly misleading.  Yes, there is a problem associated with bad actors in the patent space, but the story that doesn’t get told enough is the one relating to the small business that innovates only to have larger business rip them off.  While it is easier now to get contingency representation for patent infringement litigation, that does not mean it is at all easy.

Easier to get needs to be understood in relative terms; namely easier now because it is possible in some cases when in the past it was virtually impossible to obtain contingency representation.  So what that means is even now much ongoing infringement is not addressed because it costs too much to pursue an infringer, and that may well be where aggregators come in, buying good patents and then funding a fight that the innovator never could have undertaken.  That only properly becomes characterized as a bad actor situation if the patent infringement litigation is specious or simply being used to shake-down the defendant.

Everyone would do well to remember that the system is set up to encourage disclosure so that future innovators can build upon the inventions of those who have come before.  The patent is the reward for the benefit received.  A patent, like any other right or asset, can be abused.  A patent, like any other right or asset, can also be trampled. The trampling and ignoring of a valid patent is no less condemnable than the abuse of a patent.  Both pervert the system.  Both harm innovation.  But despite what Google thinks, patents in and of themselves are not evil and they do not block innovation.


Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of

Join the Discussion

23 comments so far.

  • [Avatar for Nick White]
    Nick White
    August 13, 2011 06:11 am


    Sure but on this blog it is the converted largely preaching to the converted. That’s not going to change or influence much. I often post comments on Slashdot, CNET, TechCrunch etc and also on other blogs where experts seem to get the focus wrong. It’s amazing how much the mainstream press take from these resources and thankfully better informed sources such as this blog.

    I would encourage all IP practitioners to post on these “uninitiated” blogs no matter how frustrating. If only for others to see there is a rational alternative view. The only way to deal with economic anarchists is to tackle them head on.

  • [Avatar for Blind Dogma]
    Blind Dogma
    August 11, 2011 02:48 pm

    Yes, one of my best sellers there is Guano Gold.

    It’s a lot like susage – better you don’t know what goes into it.

  • [Avatar for shingabis]
    August 11, 2011 05:17 am

    Glad to know there is reasonable discussion going on out there, unlike with the disgruntled and immature twerps and fanchildren over on Slashdot, CNET, ArsTechnica etc where even the inventors of worthy IP (just ignore any make-or-break research financing to get so far) are not regarded as much better than patent trolls. Stupid economic anarchists and libertarians think the only way to run the world is to pull the rug out from under everything that much thought went into establishing, and everything will sort itself out into a paradise of their childish ideals. And they all endlessly parrot each other on this because the only thinking they can muster is parrot think.

  • [Avatar for Nick White]
    Nick White
    August 8, 2011 07:11 am


    No problem.

    I see your logic but I still don’t think it will work, but will be happy if it does! It’s been a farce of huge proportions in the US for some time now and the US politicians are more focused on the needs of the Gorillas than innovative small US companies. I wonder why?

    The Patent Gorillas are already taking action. They are lobbying for change that is in their interests and I am afraid that the outcome, whilst dealing with their perceived Troll problem will stifle all the positive aspects of the NPE model for everyone else and will not deal with the Gorilla problem. The Patent Gorillas have the benefit of Troll Insurance through the likes of Patent Freedom when smaller companies are effectively excluded from such protection and are much better at lobbying.

    No my hope is that the madness which is the Nortel patent acquisition and the overpriced arms race that will now ensue is what will bust this wide open. There was no NPE in the race for Nortel. The encouraging bit is that the arms race is already opening things up with Google breaking ranks and having a go on the patent bog problem.

    The nuclear patent arsenals have just got to go. There needs to be a way to stop 10,000 crap patents nullifying the impact of a patent on genius. We need to find a way of preventing what is effectively corporate theft of ingenious IP. That means nullifying the asymmetries of the US litigation system in some way and the insidious menace of nuclear patent arsenals.

    Politicians are starting to wake up to the thicket/bog problem outside of the US and, although it will take some time we will see a swing back to basics and hopefully an upswing in innovation and job creation globally not just in the US.

  • [Avatar for CommonMan]
    August 8, 2011 12:24 am

    @Nick White,

    Sorry I attributed to Gene while I was concurring with your words on the Patent Gorillas which I see as a bigger problem for new innovators than trolls.

    One comment on your statement

    “I agree with what you say but I have no faith in the US judicial system in cleaning up the mess. It will more than likely uphold the Lodsys patents.”

    Actually, I am expecting and hoping that the courts will hold up every troll claim so the the Gorillas start to see the patent system as a problem than a weapon they can keep for themselves. I don’t expect either the judicial system or the politicians to clean up the mess by themselves. It is when the Gorillas suffer the consequences of overly broad patents on obvious stuff that they will start to lobby for something to change and only then there is hope. But before that happens, the whole system needs to be exposed for the farce it is by serious and very absurd consequences.

    As you have pointed out the problem is with the patenting system not solved by drawing of lines between trolls and gorillas. But this line is being drawn by vested interests. Gorillas and the corporate IP and patent attorneys have a vested interest in keeping the current absurdity going but not to their detriment even though logically trolls do the same thing Gorillas do, exploit the patent system (where the consumer eventually loses).

    Initially as you mentioned, the Gorillas will try to lobby and influence to get the so-called NPEs hand-cuffed so they can be the only patent enforcers to their advantage. They will also devote resources to get troll patents invalidated so that the business model of trolling is weakened and hope it will go away.

    But this will fail because I don’t think a definite line can be drawn between who is NPE and who isn’t and who is a troll and who isn’t. Most Gorillas have patents they didn’t invent and don’t use in any of their products but are willing to enforce it to stifle competition. It is difficult to write laws that avoid one but the other.

    So for any hope of unraveling this mess (which most non-practioners of technology including patent lawyers don’t or don’t want to understand), this has to become a farce of HUGE proportions. The trolls are the only hope as I see it to shake the system by turning it into such a farce.

  • [Avatar for Nick White]
    Nick White
    August 7, 2011 11:12 am

    @Blind Dogma,

    “The law, alas, is written to allow just such patenting (see 35 USC 101).”

    Thank God. There is virtually no invention that is not an improvement of something. Improvement inventions per se is not the problem and they make the world go round. Narrower (they always should be narrower) improvement patents NEVER stop you using your preceding technology. They stop you using the improvement as they should.

    In the US it is the poor quality law on what is inventive i.e. non obvious that is the big problem. Non inventions of every type LEGITIMATELY get through the USPTO. It is also the poor quality of examination at the USPTO that allows non legitimate inventions to get granted in large numbers. Couple this with an inexcusable and shameful patent backlog and a broken legal system and you have a bad situation in the US exploited by Gorillas and Trolls alike to the detriment of innovation.

    If you allow rubbish to enter a crap producing machine what you get out of the other end is not a patent thicket but a very large smelly and unusable patent bog. Nothing to do with 35 USC 101.

    @CommonMan, I agree with what you say but I have no faith in the US judicial system in cleaning up the mess. It will more than likely uphold the Lodsys patents.

    I deal with an increasing number of companies outside of the US that see the US as a no go area. The cost benefit of playing in the US is being massively eroded. The external perception for a while has been that the US system, whilst being based on sound international principles of patent law (patent law was not invented in the US), is a poor quality and raggedly implemented patent system. Uncertainty is rife and the view is increasingly not worth the climb. Also, the US market is not the only market of value and its relative value is declining. We see companies seeking patent protection in China and forgoing the US. If that had been presented to me 20 years ago as a proposition I would have thought the proposer a lunatic.

  • [Avatar for Blind Dogma]
    Blind Dogma
    August 3, 2011 07:57 am


    The Volokh link:

  • [Avatar for Blind Dogma]
    Blind Dogma
    August 3, 2011 06:54 am

    These days ANY new technology-based full solution that needs to come to market will have a number of sub-components which aren’t the core of the product but are necessary


    What you note here has been noted previously as one of the benefits of NPEs – that of being able to bust the patent thicket of the established players.

    However, this is decidely not a reflection on “software” patents. As Adam Mossoff has noted in some very fine articles (for example, see his aticle on the sewing machine wars – a whole series ran on The Volokh Conspiracy web site), any complicated technology is – by nature – exposed to patenting of improvements of its constituent parts. The law, alas, is written to allow just such patenting (see 35 USC 101).

    It is good advice to openm ones eyes wider – wider than beyond the present day anti-software patent folk beliefs, wider than their leave-you-in-the-dark dogma.

  • [Avatar for CommonMan]
    August 2, 2011 04:44 pm

    I think you should listen to what Gene is saying more carefully. Apple’s approach to patents is doing more harm to innovation and competition than Lodsys (this is not to excuse their behavior).

    We can put up Lodsys as an example and try to define what a “patent troll” is by identifying characteristics that we don’t like about them. This is essentially what articles like this one do. That is the easy part. The danger in that kind of thinking is that patent enforcers who don’t fit that definition are then considered justified even if they may be causing great harm to the society in general by stifling competition and innovation.

    Here is the basic problem that needs to be addressed, otherwise we are in a meltdown with no one able to challenge incumbents and we all suffer.

    These days ANY new technology-based full solution that needs to come to market will have a number of sub-components which aren’t the core of the product but are necessary. For example, a better mousetrap needs a door even though why it is better has nothing to do with the door itself. Now, in the past a door may not have granted a patent but these days especially with software patents, every trivial thought, idea is patented. So imagine, if one were to invent a truly innovative mousetrap and the incumbent mouse trap builder went after you for a patent on the door. You could not bring a better mousetrap to market unless you reinvented the door, the screws, etc. This is what the “Patent Gorillas” as Gene puts it are doing. Each of the incumbents is amassing a large number of such sub-component patents (most of which are trivial) not only as a way to have a detente between them but more importantly to thwart any newcomers who are unlikely to have a large enough potent portfolio.

    Because the patent office granting is broken, these entities are able to abuse the system for a distasteful business practice, not to protect their rights but to prevent competition especially from newcomers. This is a far more insidious danger than people like Lodsys. Unfortunately, the former gets lost in the discussion of the latter.

    The only reason, I am currently cheering for Lodsys is because it is exposing the farce that is the patent system in a way that affects the “patent gorillas” and their tactics as well. I hope these “patent trolls” take this system to such an extreme that the system of granting trivial patents collapses that even patent gorillas can no longer depend on them to thwart innovation and competition.

    The entities that Patent Gorillas affect the most are new entrepreneurs and venture capitalists whose business it is to to seed new innovations. If the current system of incumbent Gorillas continue, most significant technological innovation will need to come offshore or US will have to settle for technology-poor ideas like GroupOn, Facebook, Twitter, etc., to build the next generation of companies. Is this really what we want?

    People may want to open their eyes wider a bit.

  • [Avatar for Small Inventor]
    Small Inventor
    August 1, 2011 04:54 pm

    I am a lone inventor. I did my research and wrote programs to test my ideas. I approached the big companies and none bothered even to reply me. I filed for patents and paid for all the costs myself. Yet when I litigated with the hardware infringers who use my invention big time and colleted very reasonable royalties, I was called a troll. Did those free software anti-patent people ever paused for a moment to check whether I was a rich “non-practicing entity”? Not a picosecond. Human beings like to find a justification for their deeds. The real intention of many of these people is to use someone’s R&D for free, but they try to justify their act using the term troll, paint themselves as pitiable victims.

    If the term troll also covers a person who makes great sacrifice developing inventions benefitting the mankind but is robbed and smeared by the big fishes, then I am happy being called a troll and be VERY PROUD of it!

  • [Avatar for patent enforcement]
    patent enforcement
    July 31, 2011 10:06 pm

    Some observers base their disapproval of patent enforcement by NPEs on the reasoning that (because NPEs arguably profit from their lawsuits without contributing intellectual capital to society) such lawsuits create market inefficiency and deadweight loss. But, of course, so do many other capitalist activities, and I don’t see how NPE lawsuits are any more culpable than other profit-oriented activity. I suspect that this issue may come down to collectively determining what precisely constitutes “abuse” of the patent system, as opposed to what constitutes merely the sporting pursuit of profit. I’d like to hear some ideas on that topic.

  • [Avatar for Pete]
    July 31, 2011 08:33 pm

    Whitserve LLC, or is the epitome of the term “Patent Troll”

  • [Avatar for Paul F. Morgan]
    Paul F. Morgan
    July 30, 2011 08:57 am

    If ending injunctions obtainable by those providing no public products to stop companies from providing public products was really that detrimental to patent protection it would logically have ended the patent troll business. But it has not, it has increased.
    “Stealing” patented technology of others is still quite effectively protected and punished by defense costs, damages, interest, TREBLE damages for willful infringement, “clear and convincing evidence” required to invalidate a patent, and strong jury preferences for small entity patent owners.

  • [Avatar for ben]
    July 29, 2011 10:36 am

    Call it what you will…patent hoarder, patent troll, non-practicing entity, etc. It all means one thing: “we’re using your invention and we’re not going to pay”. This is just dissembling by large infringers to kill any inventor support system. It is purely about legalizing theft.

    Prior to eBay v Mercexchange, small entities had a viable chance at commercializing their inventions. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now some of those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back in the patent system with injunctions fully enforceable on all infringers by all inventors, large and small.

  • [Avatar for Next]
    July 29, 2011 10:28 am

    Go Gene Go.

  • [Avatar for Paul F. Morgan]
    Paul F. Morgan
    July 29, 2011 09:05 am

    Any sanctions even obtainable under FRCP 11 are insuffcient to deter unfounded litigation by a “patent litigation company” [forget the naming semantic arguments]. Such companies makes almost all of their money quite easily by defendants paying them off to avoid millions in patent litigation costs. That is because in patent litigation a patent owner has far less, and much easier, legal and cost burdens than defendants. Additionally, defendants [real companies making real products] can be harrassed with huge discovery cost burdens, while a “patent litigation company” has almost nothing discoverable and hence no discovery cost burdens.
    Hence, as noted yesterday, this is really a U. S. judicial system problem, and the only effective present tool would seem to be fast decisions on summary judgement motions before the defendants can be bled for such large litigation costs if they do not settle fast. But that is not being done by many D.C. judges. S.J. motions in patent cases are being ignored for years, often up until the eve of trial, too late to do much good.

  • [Avatar for Blind Dogma]
    Blind Dogma
    July 28, 2011 04:59 pm

    It is unfortunate that the NPR episode should have been labeled “When We Attack Patents!” for the amount of misstatements and subjective (non)journalism involved.

    I say unfortunate because any redeeming message, any sense of even handed objective reporting will get lost in the over-the-top onesidedness and distortions of the piece, including what I thought was the best snippet relating to Lodsys, which occurs near the end when Alex Blumberg quips: “And one interesting wrinkle about that case. The address of Lodsys? 104 East Houston Street, Marshall, Texas, Suite 190. The same exact address, down to the suite number of Oasis Research ( the non-arms-length litigator with the empty shell office in Marshall).

    If NPR ever learned to be objective and report evenly, their exposes may actually have bite when the wolf really is at the door.

  • [Avatar for Jorge M. Torres]
    Jorge M. Torres
    July 28, 2011 01:33 pm

    There are several reasons why Rule 11 is infrequently used, even in cases where warranted by litigation misconduct. In my experience, judges and magistrates don’t like Rule 11 motions. I’ve never seen someone accused of Rule 11 sanctionable conduct withdraw a pleading during the cooling off period prescribed by the Rule. If the motion is filed, it’s safe to say that the process has broken down and that the court needs to step in to play babysitter. Not fun. In deciding whether to file, you need to weigh your Rule 11 motion against all the other decisions you’re teeing up for the court — especially the ones on the merits that ultimately determine the outcome of the case. Another consideration is the reputational risk associated with accusing another member of the bar of misconduct. There’s no quicker way to damage your rep in the profession than to become known as the person who’s quick on the draw on Rule 11 motions. At one of my old firms, we took this very seriously, and there were processes in place to make sure this angle was considered before anyone filed a Rule 11 motion. Don’t get me wrong. In certain instances, I’ve advised clients to file Rule 11 motions (with success). But those instances arre few and far between for the reasons discussed above.

  • [Avatar for Patrick]
    July 28, 2011 09:44 am

    “We have the tools to solve the patent troll problem, as well as any other abusive litigation problem. It is Rule 11. Unfortunately, it is not used.”

    Gene –

    Do you acknowledge the possibility that the rule isn’t used because it doesn’t apply as often as people think it does? In other words, I firmly believe there is a world of difference between an unsuccessful patent lawsuit, and a frivolous one. Do you disagree?

    In other words, if a jury agrees that a patent is not infringed, or if a judge invalidates a patent, does that automatically mean the patent owner was acting as a “troll” in bringing the suit in the first place?

    As to the broader topic, I object to the use of the term as an appeal to biases rather than reason. Abuse of the legal system is bad in itself. How does name-calling advance the discussion?

  • [Avatar for Ed Left]
    Ed Left
    July 28, 2011 09:37 am

    patent troll definition: non-practicing entity, primarily acquires rather than creates patents, business model relies on litigation/licensing vs other source of income. This definition excludes universities, fed labs, and biotech (they primarily create patents and patent-revenue is not fundamental to staying in business). Universities use tuition/endowment, fed labs have tax dollars, biotech R&D are subsidized by biotech product revenues.

  • [Avatar for Nick White]
    Nick White
    July 28, 2011 09:20 am


    Like you I am a fundamental believer in the underlying purpose of the patent system. Over many years I have observed growing abuse of the system by companies that have the commercial clout and the vast IP estates to undermine and ignore the legitimate patent rights of lone inventors and SMEs.

    I call these companies Patent Gorillas. Effective NPEs are a very important counter balance to the anti-competitive behaviour of these Patent Gorillas. The asymmetry means that the Patent Gorillas cannot use brute force to attack and kill the NPE. The term Patent Troll as a pejorative term was coined by a Patent Gorilla so to coin another phrase its clear to me that “They don’t like it up them!”

    In the mix we have NPEs that plainly look to extort money from anyone they can. That’s not good. This is where you have the difficulty. How we fix that is not by attacking the principles of NPE operation but by ensuing that the IP system itself is fit for purpose. The US system has been an outlier in the global IP system for a long time and needs to take a hard look at itself. Get your Patent Office up to scratch, temper the bonkers litigation system you have (its set up for extortion) and put in place a low cost and effective method for any party to challenge the validity of a US patent post grant. The validity should always be checked in the courts before enforcement. History has shown that the presumption of validity is on very shaky ground in the US.

    I want to make a more general point about this debate. To my mind and based on my experience it is missing a very important point. The IP system is supposed to promote innovation. NPEs and even the so called Trolls are not significantly challenging or undermining that ideal, but that ideal is being undermined in a very insidious and damaging way that is often overlooked with all the Troll hysteria. It is being undermined by the Patent Gorillas. Their massive IP dominance and behaviour means that many do not even attempt to develop new innovations in the sectors where they dominate. The Patent Gorillas don’t go around suing small guys, they don’t need to, they just sit in the path and every small company knows what they will do if they try and get past them. At least a Troll will let you pass and move along the road for a fee.

  • [Avatar for Gene Quinn]
    Gene Quinn
    July 28, 2011 08:43 am

    Mike E-

    You make a great point about Rule 11, which is one I make frequently. We have the tools to solve the patent troll problem, as well as any other abusive litigation problem. It is Rule 11. Unfortunately, it is not used. It is quite simple to understand if you read it, but it is never applied as written, which is unfortunate for those who are on the wrong side of these abusive litigations.

    As for a definition for patent troll, that is really a work in progress. In order to make sure you are not over inclusive and capturing those who are not really trolls you do have to focus on abuse. There is nothing wrong with enforcing patent rights even if you acquired the patent and are a non-practicing entity. What makes it wrong is the abusive tactics, lack of due diligence and not caring whether there is infringement (i.e., shake down). I think the best you can do for a definition is providing guidance, which is why I explained the telltale signs of a troll, explained that acquiring patents and being a non-practicing entity is some clue, identified Lodsys as a troll and InterDigital as not being a troll. This is how common law develops, and the way the definition of a patent troll really needs to evolve.


  • [Avatar for Mike E]
    Mike E
    July 28, 2011 08:20 am

    I enjoyed the post but I still don’t know when you would consider someone to be a troll.

    For example, you write: “The telltale sign of a patent troll is one who is abusing the patent right in order to shake down a defendant for payment.” This seems pretty circular. The closest you come to defining it is probably where you say it’s one who makes specious claims in filing a patent infringement lawsuit. I would say that any plaintiff who makes specious claims for any type of lawsuit is a troll.

    I think the problem is more about the rules of civil procedure in what is required to file a claim. The RIAA and SIAA do it all the time against anyone on the cable bill for an IP address. Slip and fall plaintiffs and hot coffee buffoons get to sue too. I think the problem isn’t the patent system but the standards for what constitute a rule 11 violation and not having the loser pay in litigation.

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