"It is better to be feared than loved." -Niccolo Machiavelli

Information on the fickle beasts:

What is a patent troll?

The definition of a “patent troll” is actually a matter of great dispute; indeed, some believe a standardized definition is the first step towards effective countermeasures, though their suggested definition, “a company or business function whose primary business activity is to acquire patents for the purpose of offensively asserting them against other companies,” seems legally problematic to my untrained eye (use of “offensive” disputable, doesn’t apply to multirole law firms). Wikipedia aggrigates a few actions commonly associated with patent trolls, which are duplicated below:

• Purchases a patent, often from a bankrupt firm, and then sues another company by claiming that one of its products infringes on the purchased patent

• Enforces patents against purported infringers without itself intending to manufacture the patented product or supply the patented service

• Enforces patents but has no manufacturing or research base

• Focuses its efforts solely on enforcing patent rights

Why is patent trolling effective?

The most concise answer is risk management. Simply look at the numbers (PDF): mounting a good defense against a complex patent lawsuit costs up to $1 million for pretrial and $2.5 million for a full trial. Thus, when a patent troll files a suit meeting the currently low standard of legal disputability, a high five- or low six-figure settlement is a rational alternative to a costly defense and an unsure countersuit to recover fees, and that’s without considering the possibility of losing the suit. Some think that making a losing plantiff pay all defense costs automatically would disincentivize settlement and thus deprive patent trolls of the majority of their livelihood; however, this could have a chilling effect upon legitimate suits.

They do exist, I promise.

The troll king.

Though the term was coined earlier, there is an original patent troll: the term was coined by Intel’s General Council to describe the actions of Raymond Niro, one of the earliest IP lawyers to systematically threaten hundreds of companies with one patent as a business model, though many lawyers and firms have followed suit. On one hand, Niro has won cases netting millions of dollars for previously unrecognized individual inventors, but on the other hand it is very hard to characterize many of his cases, on behalf of trolling companies and against producers, as anything but massive drains upon the economy.

On the slaying of trolls.

Barring massive reform of the patent system, a commonly called for government action outside the scope of this post, patent trolling will continue to be a problem in some form. However, an interesting idea has arisen to fight trolling: “defense patent aggregation” (DPA). Companies adopting this business model purchase a number of patents they believe to be legally employable against existing firms, much like some patent trolls. However, instead of taking offensive legal action, DPA companies charge a flat monthly fee to producing corporations, and in exchange provides rights to all of their patents, creating a legal shield: in any battle against trolls, holding comparable patents in one’s portfolio makes a defense case stronger. The extent to which this strategy will prove profitable for the DPAs or legally effective is relatively untested, but it’s exciting to see a patent reform strategy that doesn’t depend on legislative means.