If the term is new to you, “patent troll” is a less-than-flattering way to describe an individual or a company seeking to hoard patents in an effort to thwart competitors. These entities will hold a patent, but won’t produce the associated product or service. Instead, they will target other companies who could be using or selling the patented technologies and initiate lawsuits or attempt to obtain licensing fees for the technology.
Unfortunately, small businesses may be one attractive target for such action because small firms are less likely to have the legal budget to fight off a lawsuit. A recent study shows that “patent trolls are also more likely to go after firms that employ fewer lawyers” and that these lawsuits are more likely to occur after a business has shown some positive growth. In addition, the study showed that the portfolio managers, aka non-practicing entities, that pursue patent lawsuits on behalf of inventor clients only return about 5 percent of the patent’s value to the inventors themselves.
Stephanie Kennedy is an inventor and author of a blog called IP Troll Tracker. In an e-book for Nordic IPR, she recently described patent trolls as, “…a small number of folks who operate on the margins and try to exploit small businesses by confusing them as to their coverage of the patent, don’t do any real due diligence to see if the company is using the technology, make unrealistic royalty demands, etc., with no real intention of ever enforcing the patent because it would be economically unproductive.” You can follow her blog to learn more about the types of companies and inventions that have been targets.
The lesson here is that you, your business and your invention(s) could be on the radar for future patent litigation. It pays to be aware and to know your rights. In addition, make sure that your intellectual property is protected by copyrights, trademarks and patents.
If you are a small business owner interested in protecting your intellectual property, contact EmergeCounsel today.