Patents can be highly valuable for businesses. However, for some unscrupulous parties, patents are a weapon they use to get money from legitimate companies.
These are patent trolls, and if one targets your business, you should know how to respond.
What does a patent troll do?
Non-practicing entities (NPE) or trolls pick up patents from owners selling them for a low amount. Sometimes covering everyday or commonsense types of computing, these patents typically have little value because they are vague or overly broad. The overly broad nature leads some parties to argue that these patents probably should not have been issued by the United States Patent and Trademark Office in the first place.
Armed with these patents, the trolls target parties using the protected work.
Similar to legitimate claims of infringement, trolls often start with an infringement letter demanding the target pay a licensing fee or cease infringing actions. Many accused infringers—even if they believe they are innocent or that the claim is bogus—will opt to settle and pay the licensing fee due to the high cost of potential patent litigation.
But businesses should be wary of the signs that they are being targeted by a patent troll.
If the licensing fee is far higher than the value of the work or if the letter fails to include basic information about the patent, it could very well be coming from an NPE or troll.
How to respond to a potential troll
Before you agree to pay a licensing fee or otherwise respond to a letter accusing your business of patent infringement, it can be wise to consult an attorney and do your research. Doing so will help you assess several factors, including:
- Whether the patent is legitimate
- The history of the patent in question
- Who is making the assertion
- Whether there are other parties in your same position
These factors will dictate how and if you respond. In some cases, responding is not necessary. Instead, you might wait to see if the other party is committed to following up.
If you do respond, do so through an attorney so that the asserting party knows you are taking the request seriously. At this point, you can determine whether it is appropriate to pay a licensing fee or contest the claim in court.
Patent infringement claims can be intimidating, and a considerable amount of money could be on the line. Thus, if you believe you could be the target of a patent troll, identifying them as such and responding appropriately can help protect your business and your bottom line.