Before getting to what is a patent troll let’s briefly discuss what is a patent. A patent is an intellectual property right that is given to the new and unique inventions, a patent guarantees an exclusive right to the patent holder that no one will make, sell and import his invention without his consent. A patent makes sure that no person for his own benefit is using a patented invention. A patent is generally valid for a period of 2- years from the filing date of the application.
You must have got a basic idea of what a patent is. Now, what is a patent troll? Is it something related to twitter?. Absolutely not. The non- practicing entities (NPEs) or Patent Assertion Entities (PAEs), which make money from the patent- infringement lawsuits are known as patent trolls. The patent troll has a very cunning and wicket working style, patent troll acquire the patents of the bankrupt companies but they don’t use these patents normally rather than they give the licenses of these patents to the companies that appear to infringe upon a patent they own and if such businesses refrain from complying, patent trolls start threatening them with a lawsuit. Such lawsuits can value from tens of thousands of dollars to hundreds of millions. In many cases, even if a company believes there is no infringement, they prefer to settle with the patent trolls. Europe has a very bizarre and unfair kind of rule in such kinds of lawsuits which is called “loser pays’’, according to this principle the losing party pays the legal fees of both the parties.
So how does a patent troll works?
Patent trolls constantly hunt for any existing technology or any new application that can infringe their patent portfolio and once they find a potential infringement, the trolls go in developing a full- proof attack plan, the most vulnerable prey on the list is set as the target to pick an easy victory and set a precedent for the other targets. The small businesses often decide to settle by paying the license fee rather than proceeding with the lawsuit but settling is not always the best option because once the patent trolls identify a soft target, they can set their path for the multiple future claims which can turn a short-term economic advantage of a one- time payoff into long-term fund drain from the target.
The word patent troll in itself created a negative impression in the mind of a person who listens to it for the first time. There are various debates across the globe related to the advantages and disadvantages of a patent troll. Some regard patent trolls as a hunter or a dreadful blood-sucking vampire of the world of Intellectual Property which attacks the big companies and makes money dishonestly on their cost. On the other hand, some regard patent troll as a “messiah’ for small businesses or small organizations as it helps them to prosper and grow.
So let’s look at both sides of a patent troll and see which side is a dominating one.
If we look at the bright side of a patent troll. Patent trolls only affect big businesses. A leading IP website named IP watchdog pointed out “All that has happened is that the playing field in intellectual property has been leveled out- a bit- in favor of entities in the market that don’t have the luxury of spending hundreds of millions of dollars to propagate Congress by giving them only their side of the story.” This means that if patent trolls keep on trolling the big businesses, the smaller businesses can gain a lot by putting their own ideas forward. The supporters of the patent trolls argue that patent trolls are necessary evils and they play a very vital role in ameliorating the Intellectual Property industry because they put a leash on the big companies and help the smaller companies to prosper.
Now let’s have a look at the dark or the negative side of the patent trolls. Research has found that patent litigation harms innovation and it reduces venture capital investment especially in startups and small companies. Reports show that patent litigation is on a surge and there was an increase in the patent lawsuits from the previous year and most of the suits were filed by the patent trolls. The patent litigation affects innovation in various ways such as:
It costs innovators for a lot of money.
It affects the reputation of a business in front of an innovator.
The credibility of a business is lost and the innovators invest less in the businesses especially the small ones.
R & D spending also faces a decline.
At last, we can conclude by saying, according to me patent trolls are more of an evil than a messiah because the argument put forward by the supporters of the patent trolls is that they help the small enterprises or business to prosper by restraining the big companies from exploiting the IPRs of the small companies but that is the last thing a patent troll would do. A patent troll never attacks any big company with the intent of protecting and promoting any small enterprise they do it with the intent of earning from that big company and this act of the patent trolls indirectly affects the smaller companies too. A patent troll does more bad than good because it affects the innovation in a very bad way and it also lessens the credibility of a company so the investment which an investor makes is also reduced a lot and that is why I believe that all possible reforms should be made in the existing IP laws by the WIPO (World Intellectual Property Organization) to stop these patent trolls because these are more harmful than fruitful.
References :
Patents, 30 May 2020, 12:40 pm, https://www.wipo.int/patents/en
Marianna Galstyan, Who are Patent Trolls and how do they work, 30 May 2020, 1:20 pm, https://www.investopedia.com/articles/investing/071515/who-are-patent-trolls-how-do-they-work.asp
Intellectual Property, Patent trolls: good or bad, 3 June 2020, 4:58 pm, https://sites.udel.edu/cisc356/2015/04/29/patent-trolls-good-or-bad/
James Bessen, The evidence is in: Patent trolls do hurt innovation, 3 June 2020, 5:25 pm, https://hbr.org/2014/07/the-evidence-is-in-patent-trolls-do-hurt-innovation