Staying On The Right Side Of The Law

Your Business: What To Do A Patent Troll Comes Calling

Patent trolls misuse patent rights in unfair or unethical ways, and they often do not actually supply the services or manufacture the products that the patents cover. They may purchase patent rights from companies that are in financial trouble and then proceed to strictly or unjustly enforce the terms of the patent against other businesses. They will then demand outrageous payments for use of a needed technology, product, or service. There are some things you can do however, to keep an patent troll from severely impacting your business.

Before Reacting, Do Some Research

A patent holder may hold a legitimate claim and actually be well within their rights to ask for compensation, so you should check out the legitimacy of their claim as a first step. In fact, the trolls are causing problems for true inventors and patent holders so that they are having a harder time reaping the rewards of their innovations.

When you receive letters from a troll, often they will be deliberately vague, giving a general description of the patent, but avoiding particulars of how you might be infringing on their claim. If this person or entity threatens people but never pursues the matter in court, this could be a clue that their claim is questionable. If there has been litigation, did the claimant succeed in getting a settlement, and what were the particulars in that case? 

Get Some Support and Publicize the Problem

If you determine that the patent holder is trolling you, you should contact your state attorney general's office for some guidance on how to handle it. Since patent trolling has been a growing problem for the business world, some states have been making new statutes to counter it. You can also contact consumer watchdog groups in your area to get additional information and support. Letters from either the attorney general's office or one of these entities may cause the troll to back off.

If you choose to advertise the problem, the troll may also want to leave you alone due to the negative publicity, or they may decide that unjustly enforcing their claim may not be worth the fallout resulting from it.

Consult a Patent Attorney

If the patent holder is adamant about their claim, a patent attorney can advise you of your rights under the state and federal laws, which are evolving as time goes on. In fact, a proposed federal law called  "The Innovation Act" (H.R. 9), could have some impact on preventing entities from using whole portfolios of patents to hold up industries due to the exorbitant fees they are asking for. It may ensure transparency on the actual owners of the patents, force the patent holder to be explicit when it comes to making claims of infringement, and speed up the court process on determining legitimacy of claims.

Finally, if the entity's rights turn out to be legitimate, but they are asking more than you can afford to use their product, it is possible that your attorney could negotiate a reasonable settlement so you could continue to carry on business.