What a corporation needs to know about patent law…<\/strong><\/p>\n
I’m sorry if I insult anybody by using the derogatory term “Patent Troll”\u00a0 for a non-practicing entity (NPE) or patent dealer that claims patent rights to technology and demands a licensing payment for the use of the technology. But if the name fits…<\/p>\n
I’m not saying that simply suing to protect your patent rights makes you a Patent Troll<\/a>. But it’s clear that there is an industry where patents are obtained, bought and sold for the sole purpose of initiating lawsuits.<\/p>\n
“As of January 1, 2010, PatentFreedom <\/a>has identified and profiled over 315 distinct NPEs (a number which continues to increase). Since 1985, these NPEs have been involved in litigation with nearly 4,500 different operating companies in over 3,100 distinct actions. And the pace of activity is clearly increasing. Nearly 75% of the suits between these NPEs and operating companies were filed since 2003.”<\/p><\/blockquote>\n
What is a pa
tent troll?\u00a0 When you hear the word troll you visualize the image of a troll underneath the bridge unjustly charging an unwary passerby a duty to cross the bridge. Or maybe you visualize a fisherman trolling<\/a> for fish. Let’s throw a hook out there (a lawsuit) and see what we can get.<\/p>\n
After reading through various articles on the internet on this subject we find both sides of the argument. One side of the argument is that non- practicing entities are Patent Trolls that are eroding the economy, see article by
The patent system was created by the nation\u2019s founding fathers not so much to protect individual ownership rights but to foster investment and technological advancement. Some individuals and companies, however, have opted to use the system for a different purpose: They acquire the rights to certain inventions that are crucial for the proper operation of other, larger inventions, and then essentially hold that intellectual property for ransom to be paid by those who need it. These so-called trolls typically do not make any product and, rather than inspiring innovation, tend to have a chilling effect. For a full discussion of the troll issue …see Daniel P. McCurdy\u2019s article, \u201cPatent Trolls Erode the Foundation of the U.S. Patent System<\/a>.\u201d<\/p><\/blockquote>\n
The other side of the argument is that “patent holders” are just enforcing their constitutional rights. (see “Patent Troll:” A Self-Serving Label that Should be Abandoned<\/a>)<\/p>\n
Robert C. Pozen<\/a> of the NY Times<\/a>, says patent cases end up in court because ” The quality of American patents has been deteriorating for years; they are increasingly issued for products and processes that are not truly innovative”\u00a0 and that patent rules should “…[allow] experts in the field to submit explanatory or critical comments on patent applications.” This will help inexperienced examiners make better decisions and improve the quality of allowed patents.<\/p>\n
Patent experts argue better patents will stop patent trolls. But others such as Timo Fisher and Joachim Henkel’s aren’t convinced. See paper, titled “Patent Trolls on Markets for Technology – An Empirical Analysis of Trolls’ Patent Acquisition”:One Reason Why Improving Patent Quality Won’t Solve the “Troll Problem” <\/a><\/p>\n
There is Rule 11 of the Federal Rules of Civil Procedure<\/a> that is supposed to stop frivolous lawsuits. However it appears that once a lawsuit is filed it is very difficult to prove that the lawyer or the entity filed it knowing there was no meritorious case. You don’t often see Rule 11<\/a> enforced in these cases.<\/p>\n
I wouldn’t want to defame any non-practicing entities or their attorney’s by saying that they know when they initiate a lawsuit that the patent which is the basis of the lawsuit really doesn’t cover the product or process of the defendant corporation. Call me “an attorney trying to circle the defense wagons,<\/a> using the common rallying cry of \u201cpatent trolls,\u201d but does anyone really believe that out of thousands of cases filed by Patent Trolls that Rule 11 doesn’t apply to any of them?<\/p>\n