Patent trolls

From en.swpat.org

A patent troll is a derogatory term used to characterise a company that acquires patents for the purpose of threatening product developers and demanding payment of patent royalties.

A narrower term is non-practicing entity (NPE), which denotes a sub-category of patent trolls whose only activity in a domain is patent trolling. One definition of NPE is "an entity that does not have the capabilities to design, manufacture, or distribute products that have features protected by the patent".^[1]

Patent trolls (and NPEs) are particularly a problem for the large software corporations such as IBM, Microsoft, and Google. Patent trolls are generally not a problem for free software projects, although a large software company could be targeted for its distribution of said software.

Contents 1 Formative factors 2 Frequency 3 Troll incidents 4 Troll companies 5 Related pages on en.swpat.org 6 External links 7 References

[edit] Formative factors

A similar problem is companies who do develop products, but when their product fails, they change their focus to extracting money from more-successful companies.

The problem is particularly acute when a company fails, and the only assets it has left are its patents. The receivers have a legal duty to shareholders to obtain maximum value from the remaining assets, and this may involve pursuing competitors who have succeeded in exploiting and marketing similar concepts to the ones that the failing company failed to exploit and market. The more successful the competitor, the better the chance of extracting a generous out-of-court settlement. Thus patents reward failure and penalise success.

[edit] Frequency

According to Stanford University's Lex Machina,^[2] patent trolls account for 30% of all patent litigation.

Google's Head of Patents and Patent Strategy said in March 2009:[1] "Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or “patent trolls.”"

[edit] Troll incidents

• Google Fights Back And Wins Against Bogus Patent Lawsuit From Guy Who Couldn't Even Code His 'Invention' [2][3]

"While the broad facts of the case—a pair of entrepreneurs with one failed business idea, almost no computer programming experience, and a couple of patents march into court waving those patents and demand $600 million from one of the most successful companies of the digital age—might seem far-fetched, but they’re actually quite commonplace."

[edit] Troll companies

Here are some examples of companies that are considered patent trolls:

• Acacia Research Corporation
• Blackboard inc.
• Intellectual Ventures
• WebEx - a company that acquired NCR's patent portfolio [4] [5]

[edit] Related pages on en.swpat.org

• 2009 patent litigation study - report from PriceWaterhouseCoopers which discusses non-practicing entities
• Calculating infringement damages in the USA - what's up for grabs
• Litigation
• EBay v. MercExchange (2006, USA)
• Examples of use for sabotage

[edit] External links

• Patents Trolls Gaining More Momentum, BoycottNovell.com, August 2008
• Wikipedia's article: Patent troll
• Patent Trolls: They Do Exist, Technologizer, January 2010
• Patent Litigation Run Amok, from Troll Tracker, December 2007
• Patent Auctions Offer Protections to Inventors - an New York Times article ignores the public interest and defends patent trolls as simply being "business minded". Yes, and leeches drink blood because they're "survival minded", but for the host, the parasite is a negative thing.
• An application to the USPTO for a patent on... patent trolling!

[edit] References

1. ↑ Definition used by PriceWaterhouseCoopers in their 2009 patent litigation study
2. ↑ http://technologizer.com/2010/01/07/patents-trolls-they-do-exist/