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Standing Up to the Patent Troll, the Big Bad Wolf of the Patent World

By: , Posted on: March 28, 2017

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It seems as though hardly a week goes by when patent trolls are not in the news.  For instance, just last week I noticed several stories about Donald Trump, Jr.’s involvement with a company called MacroSolve, which is a software company whose main source of profits since 2011 allegedly has been derived from patent infringement suits.  Yet another story featured a commentary by Diane K. Lettelleir, Senior Managing Counsel of JCPenney, on the so-called “patent troll problem.”  Ms. Lettelleir explained that the numerous patent infringement suits JCPenney has endured over the past decade have not only cost the company a great deal of money but have also taken a toll on the company’s investments in human capital.

So what exactly is a patent troll?  That is a good question and one that even Congress has had difficulty figuring out.  According to MacroSolve’s CEO, Jim McGill, a patent troll is any company that enforces its patent rights.  See https://arstechnica.co.uk/tech-policy/2017/03/macrosolve-donald-trump-jr-patents/ (“‘If you enforce your rights, you’re a troll,’ MacroSolve CEO Jim McGill said in a 2014 interview with Ars Technica. ‘If you don’t, big companies will walk all over you.’”).  Most definitions of the term “patent troll,” however, are not as broad as Mr. McGill’s.  See, e.g., Ahmed J. Davis & Karolina Jesien, The Balance of Power in Patent Law: Moving Towards Effectiveness in Addressing Patent Troll Concerns, 22 Fordham Intell. Prop. Media & Ent. L.J. 836 (2012) (“A patent troll is an entity that focuses solely on capitalizing on patent portfolios.  The troll purchases or otherwise obtains patents from other companies for purposes of licensing and enforcing them, rather than practicing any inventions covered by those patents . . . A typical business model for [a troll] is to acquire patents that apply broadly across a particular industry (often business method patents), identify potential infringers, threaten litigation, and then either collect license fees from those entities or bring lawsuits against those that refuse to license.”) (footnotes omitted).

Regardless of how you define the term “patent troll,” most people agree that such entities are bad news for our economy because they cost consumers and retailers billions of dollars each year.  The patent troll is, for lack of a better analogy, the big bad wolf of the patent world, huffing and puffing by suing legitimate businesses for patent infringement.  The question that remains is what can be done about them?  More specifically, must one succumb to litigating a patent infringement lawsuit in federal court in order to defeat a patent troll?  The short answer is, not always.  Recently Congress, through its passage of the Leahy-Smith America Invents Act (“AIA”), provided alleged patent infringers with several tools to invalidate patents outside of U.S. district court litigation.  Indeed, in many instances alleged patent infringers can challenge patents in the U.S. Patent and Trademark Office (“U.S. PTO”) using proceedings known as “post-grant proceedings.”  Among other advantages, post-grant proceedings are typically less expensive and faster than district court litigation.  And if the U.S. PTO invalidates one or more claims of a patent before a district court reaches its decision in a patent troll’s infringement litigation, the patent troll’s district court litigation is likely to end.  While there is still much work to be done to solve the problem of patent trolls, Congress’ implementation of post-grant proceedings has restored some of the balance of power between patent trolls and those they allege infringe their patents.

america invents act primer

For more information on post-grant proceedings, as well as other strategies for defeating patent trolls, see America Invents Act Primer, by Sarah Hasford.  This work provides discussions of each and every one of the AIA’s substantive provisions. More specifically, and whenever possible, each discussion of the AIA’s provisions includes the following key features:

  • An identification of the AIA section’s effective date, including the statutory basis for such dates;
  • A direct comparison of relevant pre- and post-AIA statutes;
  • An analysis of the similarities and differences between pre- and post-AIA statutes;
  • A discussion of the legislative goals that were addressed by the AIA section; and
  • An analysis of the practical implications of the changes made by the AIA section.

Click here below to download the first chapter which offers an introduction to the America Invents Act:

Download (PDF, 1.22MB)

Visit elsevier.com and use discount code STC317 at checkout to save up to 30% on your very own copy! Click here to access this book on ScienceDirect!

About the Author

sarah hasfordSarah Hasford has been involved in the field of patent law for over ten years. She began her career working as a Patent Examiner at the United States Patent and Trademark Office in Alexandria, Virginia where she examined patent applications directed to heterocyclic pharmaceutical and agricultural compounds. After working as an Examiner, Sarah attended law school at Franklin Pierce Law Center (now known as the University of New Hampshire School of Law). While in law school Sarah interned for the Honorable Arthur J. Gajarsa of the United States Court of Appeals for the Federal Circuit.

Upon graduating from law school, Sarah entered private practice in the Washington, D.C. area. Sarah’s practice spanned all aspects of patent law, including patent prosecution, opinion work, and litigation with an emphasis on pharmaceutical patent litigation under the Hatch-Waxman Act. In 2015, Sarah left law firm practice to pursue her passion for educating non-legal professionals about patent law.  Sarah can be reached at sarah.hasford@gmail.com.

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