Patent Trolls’ Profiteering

This astounding article in the US edition of ZDNet is headlined, “56 percent of all patent lawsuits are made by patent trolls.” The author of the article, Steven J. Vaughan-Nichols, goes on to explain that while patent lawsuits have always been a business tactic in competitive fields, the filing of patent-troll lawsuits has doubled in the last five years. In 2007, 24 percent of cases were filed by patent trolls; that figure rose to 56 percent in 2012. patent trolls

A patent troll is commonly recognized as someone who buys patents at greatly reduced prices from companies in distress, then proceeds to send a barrage of legal threats to sue any company which is remotely connected in some way to the field in which the patent applies. Because defending oneself against a patent lawsuit is ruinously expensive—costing as much as three-quarters of a million dollars—most companies will settle with a plaintiff to avoid a trial.

Vaughan-Nichols sees the problem as stemming from the Patent & Trademark Office’s practice of granting patents “for ideas that are neither new nor revolutionary.” Such loose patent-granting enables the trolls to continue their shakedown unabated.

However, pushback against the patent trolls has been materializing in the Open Invention Network, “an intellectual property company that was formed to promote the Linux system by using patents to create a collaborative ecosystem”—and freeze out the trolls.

Another company, Rackspace, has countersued patent-troll Parallel Iron, which has made millions off of many companies that simply use computers in their businesses. Rackspace and Red Hat won a decisive court victory recently against patent troll Uniloc, which had attempted to sue anyone using Linux. The case was dismissed when “Chief Judge Leonard Davis found that Uniloc’s claim was unpatentable under Supreme Court case law that prohibits the patenting of mathematical algorithms.”

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