Patent trolls abuse laws for their own gain

Glenn W. Peterson

Patent trolling is a recent development in the world of business litigation, and it is transforming how patents are used in all sectors of the economy. According to the New York Times, patent trolls are a new breed of business that neither develop products nor conjure up innovative ideas. Instead they spend their time buying up patents and litigating, or threatening to litigate, companies for patent infringement.

One of the key methods patent trolls use to be successful in their endeavors is that they buy extremely vague patents that cover many technologies or ideas that are widely used when companies are financially vulnerable. They then use these cheap patents to target companies who use anything that could be construed to be covered under the patent and send the businesses letters in which they demand the use of the patented item or idea ceases.

Alternatively, the business can choose to pay a licensing fee for its continued use. Since patent litigation often takes years to unfold, the costs of defending a suit can easily outpace any licensing fees a company would pay to a troll. This makes it more difficult for these targeted companies to fight the cases brought against them. Instead, they simply pay the troll’s fees and move on. This is the patent troll’s main source of revenue.

According to the Electronic Frontier Foundation, small developers and other small businesses are increasingly becoming a target for patent trolls. Application developers, who specialize in the creation of applications for electronic devices like tablets and smartphones, are becoming major targets for their use of things like upgrade and in-app purchasing technologies. Major litigation between trolls and the largest technology companies in the world are pending, but it could be years before any additional case law is decided in the matter.