When patent law first went on the books back in 1787, it was intended to provide incentives for innovation and to promote the progress of “the useful Arts.” Certainly, patent law has protected and rewarded many inventors, artisans, and scholars since then, but as with anything, there will always be people who take advantage of the system.
A “patent troll” is defined as any person or entity that owns a patent but does not produce the patented product or practice the patented method. The troll makes money by demanding licensing fees from as many people or entities as they can. The troll sends out demand letters or lawsuits, far and wide, often involving a portfolio of patents, to persons or entities that the troll feels have infringed on their patent. The letter is typically vague to avoid declaratory judgement lawsuits, which assert that a real problem exists because the plaintiff has been credibly threatened with suit for allegedly violating a specific patent. The troll just wants to throw a whole bunch of lawsuits out there and hope that one sticks, even though the troll has never made the product and did not actually invent anything.
Congress has wised up to these so-called trolls, and is currently working on “anti-troll” legislation to discourage this behavior. If enacted, the “Innovation Act” would shift the litigation fees of BOTH sides to the losing side to discourage frivolous litigation. Because patent trolls sometimes hide behind a web of shell companies to avoid being held accountable for stirring up unnecessary litigation, the act would require plaintiffs to disclose who actually owns the patent before proceeding with litigation. Also, courts would be required to determine if a patent is valid or not, early in the proceedings, so that patent trolls could not extort money from others based on invalid claims. In addition, the act would limit often pricey and time-consuming discovery.
While it’s obvious that patent trolls are taking advantage and that these damaging behaviors must be addressed, it is crucial that the legislation does not go so far as to limit innovation and punish those who may fit the “definition” of a patent troll but who are not abusing the system. There is a fine line between solving the problem and making the problem a whole lot worse.
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