Businesses complain about it all the time: having to defend themselves against patent trolls and frivolous litigation. But many business owners are still in the dark about what exactly a patent troll is, how they operate, and why small businesses should be worried about them.
Patent trolls don't only go after giant corporations like Apple and White Castle. They can also stop a startup in its tracks. So here is how patent trolls work and how you can protect your small business.
Who They Are, What They Do, Why They Do It
The Electronic Frontier Foundation provides a handy working definition of a patent troll:
A patent troll uses patents as legal weapons, instead of actually creating any new products or coming up with new ideas. Instead, trolls are in the business of litigation (or even just threatening litigation). They often buy up patents cheaply from companies down on their luck who are looking to monetize what resources they have left, such as patents.
These patents can be overbroad or vague and therefore cover a wide range of products or technologies, giving trolls even more victims. A patent troll will then identify a business producing a similar product or using a similar technology and threaten litigation unless the business pays exorbitant licensing fees.
How to Stop Them
While the patent system was designed to protect innovation by giving inventors a 20-year monopoly on their invention, lately patents have become a vehicle to extort licensing fees or infringement awards. Patents are vital to a small business, making sure competitors don't steal a good idea, and defending a legitimate patent can save a business. The problem is distinguishing between the trolls and the true innovators.
Fortunately, legislators have noticed the dilemma and proposed a couple of bills, the Innovation Act last year and the TROL Act this year, that would stem the troll tide. And while the Innovation Act failed and the TROL Act has its detractors, the recognition of patent trolls as a problem is the first step in finding a solution.
Almost all patent infringement litigation is complicated and costly, and it may help to have an experienced intellectual property attorney on your side.
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