The term patent troll has caught the attention of legal bodies in the last few years. This is because the so called patent trolls have been regularly found to use the tents of patent laws to defeat the very purpose for which the patent law exists.
Patent trolls are those non-practicing entities which indulge in speculative litigation by purchasing obscure patents and then sitting on them until someone else strikes the same idea and develops a product. Since the patent troll still holds the patent rights, the courts have to grant them damages in a case where otherwise the patent owner would have done nothing but sit on the patent.
A patent troll operates like any other company to a certain extent. They can be equated to a patent holding subsidiary created by many big corporations but this patent holding part is where the similarities end. These companies tend to protect and exploit their patent portfolio very aggressively. The first major difference between a patent holding company and a patent troll is that patent troll will focus on getting more money from people who are already using the patent and they rarely seek out the new applications of things they already have patented. You may also consider it as a hit and run warfare of companies where the weapons are patents and other forms of intellectual property.
A patent troll company will monitor the news for new product launches, changes in popular products etc. They also tend to keep an eye on the new patents which are being published to find if any patent which infringes any of their holding has been filed or not. The favorite victims of patent companies are small startups which are riding on a one trick pony and have little to no money to defend themselves. This allows them two way benefit. One, it ensures an easy victory and initial cost recovery of patent purchase. Two, this sets a precedent which can be exploited against other victims of patent trolls for the entire duration of the patent remaining valid.
Before actually plunging into a patent litigation, patent trolls tend to file a perfunctory infringement complaint. Some may accompany this with a legal notice. Most victims will go for an early settlement which allows them to protect themselves from the nuisance of the litigation. Moreover, the fact that jury trials are rather uncertain and their outcomes are generally very unpredictable means that most victims prefer settlement. Plus, if the patent troll wins, the losing entity will have to pay litigation costs, damages and also the royalty that was due on the legitimate use of patent.
Various steps have been taken by different courts to protect people from patent trolls and eradicate misuse of the law but the need of the hour is an overhaul of the patent laws.
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