Patent Trolls: Friends or Foes

People know patent trolls as either patent assertion entities (PAEs) or non-practicing entities (NPEs). These are companies that inventors either sell or license their patents to, or the companies can purchase patents from bankrupt companies trying to liquidate their assets. Are these companies helping small time inventors to market their ideas or are they preying on individuals and companies to inhibit the intellectual property process?

Some people see patent trolls as a way for small inventors to sell or license their patent and make a return on the R&D. These patent trolls can market the invention and bring it into the market place more efficiently than the small time inventor can. Also these companies help the inventors that are only interested in the creation of, but not the marketing or production of their inventions.

However, others view these companies as intentionally inhibiting the patent system and increasing the amount of patent litigation. The trolls prey on the small inventor and have no concern for their intellectual property rights. Once the trolls own the patent, they can then file law suits against infringing companies. Or they can sit on the patent, not doing anything with it, keeping other companies’ productivity and creativity at a standstill.

There have been studies showing that law suits filed by the trolls have tripled in the past two years to roughly 70% of infringement suits. Other studies have shown that amount of IP law suits have remained constant over the past decade still only making up 1.5% of all civil suits in the America.

President Obama has described the trolls as companies that “essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.” The Supreme Court of the United States is scheduled to hear two cases this year about possibly making it easier for those targeted by the trolls to collect attorneys’ fees. As of November 20, a House of Representatives panel has approved legislation making it harder for trolls to file lawsuits with vague and overly-broad patent claims.

There are patent attorneys that think these troll companies play a vital role in our nation’s economy. And, that the attention to the patent trolls is overblown and hyperbole. The increase infringement litigation is from the 2011 legislation limiting defendants in an infringement case. Now where attorneys would have filed a single law suit, they must file multiple.

So, are patent trolls here to help and provide a service to the innovation economy or are they in place to inhibit and extort the patent process?

by Samantha Dorsey, a current 2L and IP Law Journal Executive Editor.

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