PATENT TROLL

DHANYA N. MENON

ATTORNEY

PRINCIPLE OF PATENT LAW

“A Patent Not Only Prevents The Imitation Of The Patentee’s Technology But Also Limits The Ability Of Inventors To Develop And Market Their Own Technologies.”

DEFINITION

“A patent troll is somebody who tries to make a lot of money off a patent that they are not practicing and have no intention of practicing and in most cases never practiced.”

WHO/WHAT?

• A person or entity

• Acquires ownership of a patent

• Without the intention of actually using it to produce a product

• “nonproducing entity”, “nonpracticing entity”, “Patent Shark”

• Buyers as well as sellers

THEY DO?

• Procure patents• Licenses the technology• Identifies the ingringers-Sues an

entity• Only enforce patents against the

alleged infringers• Interested in exclusion right; not

in the underlying knowledge.• Only concern is of the damages

or settlement payment

THEY DON’T DO?

• Manufacture products• Commercialize the process• Transfer the technology * * * Though the inventions are

not copied, but developed independently, patent suits can be brought

WHO ARE NOT?

• University holding patents: Though non practicing entities

• Individual Inventors who licenses his invention to others for commercialize

THREE STRATEGIES

• Injunction based strategy: Under legal threat of an injunction - seeks a favorable settlement

• Damages based strategy: damages awarded by the court for infringement

• Switching-cost based strategy: exploits the high cost for switching to a non-infringing technology

WHO HELPS?

• Inefficiency in the patent system

- Excessive damages

- Patentee friendly injunction

- Generous granting of patents

- Disclosure – not practice that grant

monopoly

TROLL PATENT ?

• Is owned by someone that does not practice the invention

• Is infringed by, and asserted against, non-copiers exclusively

• Has no licensees practicing the particular patented invention except for defendants)

• Is asserted against a large industry

TROLLS AND INJUNCTION

• General rule: “courts will issue permanent injunctions against patent infringement absent exceptional circumstances”

• eBay Inc. v. MercExchange, L.L.C., US Supreme Court rejected this general rule.

• Reason: “An industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees.”

TROLLS & DAMAGES

• Patent Troll v. Apple

NTP- Patent – wireless e mail technology – files suit –unfairly using their technology – in 2006 – similar suit – Research in Motion – paid $612 million to NTP – does not produce or offer any wireless e mail software services.

Thank You