If you deal with or could potentially deal with patents in your business, then you must be prepared to defend yourself against certain entities. One of these is patent trolls, who can do a great deal of harm, including market losses and legal and reputational costs. Here are our tips on how to defend against patent trolls.
How to Defend Against Patent Trolls
Patent trolls, or non-practicing entities (NPEs), are known for targeting companies with patent infringement claims, prioritizing litigation over innovation. They can be a serious threat, especially to smaller businesses with limited resources.
Unlike companies that aim to protect their innovations for competitive advantage, NPEs apply a different strategy. They often purchase patents from others and then seek out businesses to accuse of infringement, leveraging the threat of expensive lawsuits to pressure companies into settlements.
Being able to identify an NPE is critical for your company. Even if your business is on the smaller side, it can still be on the radar of patent trolls. With 55% of businesses targeted by patent trolls being small enterprises, knowing the hallmarks of an NPE is vital. Your business might be at risk if any of these sound familiar:
- Legal notices: You receive unexpected legal correspondence claiming patent infringement.
- Vague infringement claims: The infringement claims are often broad or unclear, making it difficult to determine the specific issue.
- Licensing demands: There are demands for licensing fees without a clear explanation of how your product or process infringes upon the patent in question.
- Settlement over trial: The entity is more interested in settling out of court than proving infringement claims in a trial.
- Patent portfolio: The plaintiff has a large portfolio of patents, many of which are not being actively used in products or services.
Defending Against Patent Trolls
Encountering a patent troll can be a daunting experience for you and your business, especially if resources are limited. Here’s how to fortify your position and stand firm against these challenges.
Have an Intellectual Property Lawyer at the Ready
Having a knowledgeable intellectual property (IP) lawyer is critical when navigating the complex legislative landscape where patent trolls lurk. A legal expert who understands the intricacies of patents and how to guard against predatory litigation can effectively defend your business’s innovations and exclusive rights.
Inventors and innovators, particularly those within small businesses, are often prime targets for patent trolls due to limited time and resources. Establish a relationship with an IP lawyer early on to protect your services and products.
They can provide valuable insights into the areas where you are most at risk and prepare a preemptive defense strategy, potentially saving you significant expense and time in the long run.
Research Your Infringement Risks
As an innovator or business owner, investing time and resources upfront can save you from costly legal battles with patent trolls later on. Begin with a thorough prior art search. This involves examining existing patents and published materials to make sure your products or services do not infringe on someone else’s exclusive rights.
Not only does this provide peace of mind, it also helps in building a robust, defensible IP portfolio for your business. Consider conducting Freedom to Operate (FTO) searches, which detail the extent to which your work can be carried out without infringing on valid patents. These searches can identify any potential legal barriers and modify your strategies accordingly.
Remember that the Patent Trial and Appeal Board (PTAB) offers procedures like post-grant reviews and inter partes reviews, which you can use to challenge the validity of a patent that poses a risk to your business. These reviews can be strategic tools in your defense against patent trolls and can often be more cost-effective than litigation.
Consider Joining Organizations Specializing in Defense Against Patent Trolls
Your time and resources are critical when defending against patent trolls. One proactive approach is to join specialized organizations that provide assistance and strategies, such as identifying prior art or navigating inter partes reviews.
Being a member of such groups offers multiple benefits:
- Access to a network of innovators and inventors who can share valuable insights.
- In the event you face an infringement claim, these organizations can help reinforce your exclusive rights to your services and products.
Joining a defensive patent community aids in combating patent trolls and also empowers you to focus on your business’s growth and innovation.
Go Public
When facing allegations from a patent troll, your immediate action can significantly shape the outcome. One effective strategy is to go public about the situation. Transparency about your challenges can sometimes deter patent trolls, who prefer operating in the shadows to avoid scrutiny over their dubious claims.
Types of Patent Trolls
Here are some common activities patent trolls partake in:
- Enforcing a utility patent without any intent of manufacturing a product or providing a service based on that patent, or without using it to conduct research, or otherwise utilizing it for the greater good.
- Pursuing patent infringement claims that are baseless with the intent of stifling competition (these claims are ultimately easier and cheaper for competing companies to settle than to litigate.)
- Buying a patent (usually from a bankrupt company at auction) with the intent of suing a competing company by claiming that it has a product that infringes upon the newly purchased patent. Any utilization of a patent to enforce patent rights only.
Related Questions
What Are the Defenses Against Patent Infringement?
Non-infringement asserts that your product or process doesn’t infringe on the patent because it’s different. Determining invalidity hinges on showing that the patent should not have been granted in the first place due to existing prior art. You could argue inequitable conduct if you demonstrate that the patent owner engaged in misleading behavior during the application process.
How Do You Beat Patent Trolls?
When you’re targeted by a patent troll, it’s important to remain calm and strategize. First, don’t rush into a settlement; assess the validity of the infringement claim carefully. In many cases, these claims may be exaggerated or unfounded. Seek legal advice from an IP lawyer who understands the nuances of patent law and can help navigate its complex terrain.
What Are Other Names for Patent Trolls?
These entities are sometimes called “patent sharks” or “patent assertion entities”, emphasizing their aggressive and litigious nature. In some circles, they might be referred to as “non-practicing entities” (NPEs) since they hold patents without intending to develop any products or services. They also go by names like “patent dealers” or “patent marketers”.
Conclusion
As a business owner or innovator, it’s vital to understand how patent trolls operate and the common tactics they employ, empowering you with the means to counteract their claims. Remember, the key to success here is preparation and vigilance. By understanding the landscape and being aware of the tools at your disposal, you’ll be well-positioned to mitigate risks posed by patent trolls.
