Battle of the trolls
No, we are not talking about Middle-earth (sorry nerds). We are talking about an industry nuisance – the patent troll. Now, the image that may come to mind for you upon hearing the term “patent troll,” is one of a gnarly, greenish creature under a bridge sketching indecipherable images. The funny thing is, actual patent trolls are not that far off.
A patent troll, or a non-practicing entity (NPE), is an individual or company that acquires overly broad patents for the sole purpose of extorting licensing fees from legitimate creators. Today, more than half of patent infringement claims are brought by trolls, and software patents account for the majority of recent filings due to the formerly relaxed standards that made it easy for trolls to obtain them. These slimy practices are often rewarded due to the high costs of litigation.
Patent litigation is so expensive that it is considered the sport of kings. Many companies are not up to the fight and choose to cave in to the demands for licensing or “royalty” fees rather than spend hundreds (yes, hundreds) of thousands of dollars in legal costs. The good news is, times are changing, so don’t bust out that white flag just yet.
In June 2013, President Obama issued executive orders “to protect innovators from frivolous litigation.” In June 2014, the United States Supreme Court handed down a ruling that significantly heightened the standards for software patents, which should limit the number of patents obtained by trolls. Additionally some state courts have taken action as well, including most recently, North Carolina, whose governor just two weeks ago signed the Abusive Patent Assertions Act, which aims to penalize patent trolls for sending “bad faith” demand letters.
While a great deal more is needed to stop patent trolls from extorting money and curbing innovation, we are seeing a good pattern here. Owners of valid patents should no longer quickly settle and give into these trolls. If you find yourself at the receiving end of a patent infringement demand letter, here are some things you should do:
-Do not ignore the notice
-Contact an intellectual property attorney who can assist with the “infringed” patent[s]
-Team up with other named defendants
-Strategize with your attorney on the best/most cost effective way to respond to the demand
Digital Law Group can help you navigate the patent process with ease – from provisional filings to defense. Contact us today to schedule your free consultation.