One of the risks of being an entrepreneur, especially smaller developers and companies, is you may become the target of a patent troll. If you get a notice from a company that might be a troll, there are multiple ways to respond to such a threat.
How the Patent System is Supposed to Work
The purpose behind the patent system in the U.S. is to give artists, entrepreneurs, and inventors an incentive to innovate and create new inventions, designs, and methods. When you apply for a patent, you must disclose how the invention or method works and enough information that someone else could create or use it themselves. In exchange for your disclosure, the United States Patent and Trademark Office (USPTO) gives you a 20-year monopoly to control who can practice (legalese for “create” or “use” depending the circumstances) your patentable device or method.
Unfortunately, the USPTO sometimes grants patents that are overly broad or vaguely written, such that they apply to common activities already in use in the marketplace (especially in the areas of coding and software development). This creates opportunities for trolls.
Patent Trolls: License or Lawsuit
In general, patent trolls are companies that don’t sell any products or services. They’re not even inventors. What they do is purchase ambiguously written patents at a bargain from companies that are struggling financially and then send letters to companies they suspect may be infringing on their newly acquired rights. These letters demand that the company pay them a licensing fee, and threaten litigation if the company refuses to pay.
The troll hopes the company will pay the fee to make the troll go away. Even if the company does not think they’ve done anything wrong, it may be cheaper and easier to pay the licensing fee rather than risk spending years in litigation. These licensing fees can be tens, even hundreds, of thousands of dollars, but these fees are lower than what the company might pay defending itself.
How to Respond to a Patent Troll
If you get a notice from a potential or known patent troll, call a lawyer immediately to discuss your options. Your patent lawyer can research whether this company has a history of suing for patent infringement and how long until the troll’s patent expires. They can help you examine your options, which may include ignoring the notice in hopes they don’t file a lawsuit against you or filing a Notice of Reexamination with the USPTO to challenge the validity of the troll’s patent.
If you think you’re the target of a patent troll of if you need any help with your patents or other intellectual property, please send us a message. We have lawyers licensed in Arizona, Connecticut, and New York, and we can handle federal intellectual property matters in any U.S. state and assist with international matters. For even more information, be sure to connect with us on Facebook.
Post written and edited by social media attorney Ruth Carter.