Patent Trolls in the news
Interviewer: The Washington Post recently published an article titled “How Vermont could save the nation from patent trolls.” What do they mean by “trolls?”
Patent Attorney: Patent trolls have been in the news a lot lately. In fact, if you follow me on Twitter, then you’ve probably seen links to some interesting articles. Wikipedia gives a good definition of patent troll: “A patent troll, also called a patent assertion entity (PAE), is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question.” Sometimes, patent trolls are called patent holding companies.
Interviewer: I’ve heard that universities and government research laboratories do essentially the same thing.
Patent Attorney: You mean they develop technology, patent it, and then license the technology to companies.
Interviewer: Right, but universities aren’t in the business of making products. So are they patent trolls?
Patent Attorney: No, universities and government laboratories are not typically labeled as patent trolls. Instead, they are referred to as a non-practicing entity (NPE).
Interviewer: Why aren’t they considered to be patent trolls?
Patent Attorney: Universities and research laboratories are generally considered to be making developments and advancements for the good of the people. While they have the resources and capabilities to conduct important research, such as cancer and other preventative disease research, they typically are not well suited to deploy any products. Instead, these laboratories collaborate with businesses that do have the means to develop, test, and bring products to market. So no, these laboratories are generally not considered to be patent trolls.
Interviewer: I see, so why the negative connotation for patent trolls?
Patent Attorney: Well you’ve probably read in some of the articles I’ve linked to on my Twitter account, that these patent trolls obtain patents and then go after companies that are actually making products, and seek out damages, even though there was really no damage to the patent troll. The patent troll never tried to bring a product to market. They are just trying to collect money and even worse, stop legitimate companies from manufacturing products.
Interviewer: So what are states doing to stop these patent trolls?
Patent Attorney: It’s interesting, the article says that Nebraska sent a letter to one of the law firms allegedly representing patent trolls, to leave Nebraska businesses alone. The article says that the letter apparently “warned [the law firm] that it would face serious consequences under Nebraska law if it engaged in ‘baseless harassment’ of Nebraska businesses or pursued ‘costly and destructive litigation’.”
Interviewer: I thought the article was about Vermont?
Patent Attorney: Yes, the article explains that Nebraska is the second state going after these so-called frivolous lawsuits.
Interviewer: And Vermont is the first state?
Patent Attorney: Right, apparently Nebraska was inspired by Vermont, who filed a lawsuit in May against a patent holding company after several Vermont businesses were threatened. Apparently even two Vermont charities were threatened by the patent holding company.
Interviewer: Are any of the sates successful in deterring patent trolls?
Patent Attorney: I think that is yet to be seen. But, a lot of companies, and even some charities according to this article, are being threatened with litigation, and so it is definitely making the headlines lately.
Interviewer: Are there any laws specifically on point?
Patent Attorney: The article does mention the use of Vermont’s Consumer Protection Act, and legislation was also passed in May in Vermont giving someone accused of patent infringement the right to counter-sue if it is in bad faith. Of course, proving bad faith is a whole other issue in itself.
Interviewer: Sounds like we will be hearing a lot more about patent trolls . . . . Thank you, I think that’s all we have time for today.
