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The truth about patent trolls

A patent troll belongs to the field of intellectual property and, more specifically, to that of licenses. It is the name given to a company or individual that uses license and patent litigation as its main economic activity. The name patent troll was used in 1993 to describe companies that file multiple cases of patent infringement litigation. Peter Detkin popularized the term in 2001 when he was working for Intel.

This type of company is more commonly known as Non-Practicing Entity (NPE) (“corporation without activity”) since its main characteristic is not to produce any goods or services. This model is similar to blackmail: the company acquires one or more patents in the technical field that it does not operate on its own. Then it seeks to contract operating licenses for its share ownership of companies that produce the goods or services, threatening a court summons for infringement of said patents. This action is often based on disputed patents whose legal force is weak. Therefore, a significant portion of litigation involving patent trolls is based on software patents or business method patents. Your targets can be both large companies and small tech companies that are unable to raise the necessary funds for a trial.

Companies often pay the troll because, in the worst case, the company is prohibited from using the technology claimed in the patent and, in the best case, the legal costs are well above what the troll asks, even if the case is won. . Trolls’ activity is limited to the acquisition, valuation and sale of patents.

A troll can also be paid to protect a company against another patent troll. If another patent troll sues the company, the patent troll protector will fight back against this patent troll with the use of other patents. The patent trolls agree to amicably resolve this type of situation.

Note that more and more manufacturing companies are using the services of NPEs to aggressively develop their patent portfolios while cross-licensing NPE portfolios.

In 2006, RIM, the maker of BlackBerry mobile phones, paid NTP $ 612.5 million to stop litigation in US courts. While this practice is still largely concentrated in the US, it is already happening in Europe, as evidenced by the dispute between Nokia and HTC against IPCom.

To combat this abuse, a global reflection on the purpose and function of patent law as it is perceived today seems necessary. The activity of patent trolls can restore a balance of power between individual inventors and large groups against whom they would otherwise have no defense against infringement. The average cost of a violation lawsuit has reached hundreds of thousands of dollars.

Troll strategies are legal. It is only the right available to any owner seeking to enforce an operating monopoly that is conferred by obtaining a patent. The definition of NPE could apply to many groups, including IBM. This company sells patent licenses in a technical field that it does not operate on its own.

The current reform of patent law in the United States raises a debate about the role of these practices. The Obama administration has launched a first series of strong measures capable of limiting the power of patent trolls. Among the barriers, one in particular should require disclosure to the court of all persons or entities that may have a financial interest in the complaint. For the Obama administration, the measures have very clear objectives to increase the functional costs of patent trolls, since the work before the judicial process would be much more important.

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