Caught in a Patent Lawsuit? 67% Chance it was Filed by a Troll

Patent legislation that could have put a stop to endless patent trolling in America may have lost its steam in Congress, but policymakers have not given up on the idea of reining in trolls. Yet. Patent lawyers know that most of the lawsuits they fight in behalf of their employees are filed by trolls looking to make easy money. Policymakers agree on this fact as well. And though the law may have failed to do something about it this time, the powers that be have their eyes on those who make a living out of filing frivolous lawsuits.

Lawyers love patent trolls because these alleged companies file plenty of lawsuits.

Lawyers love patent trolls because these alleged companies file plenty of lawsuits.

Why? Because they are not a nuisance anymore. With over 67% of all patent lawsuits being filed by trolls and the payments they exact from top companies increasing in amount, this has become a serious cause of concern for all those involved.

Study Shows the Extent of Trolling

The professional services network PricewaterhouseCoopers has done a study that shows that the trend of patent trolling has been getting worse over the years. So it does not matter that the average payment for a patent lawsuit filed by a bona fide patent lawyer has decreased over the same period of time. By filing more number of lawsuits than their practicing counterparts trolls are still making way more money than the industry can afford to give away. So, even though the median in patent payouts has hit a low, trolls are still laughing on their way to the bank.

Patent trolls – also called ‘non practicing entities’ because they only stockpile patents without making any use of them – are among the first people to file for an infringement lawsuit. Most of the times, the company they have sued decided to end matters with an out-of-court settlement rather than stretch the case to prolonged court proceedings.

The PwC findings show that the median awards given to patent trolls is now almost three times higher than what is given to other companies who file legitimate patent lawsuits. And while these non-practicing-entities accounted for a 28% of all patent lawsuits just five years back, they now file almost 67% of all lawsuits that the USPTO and other American courts see on a daily basis. Also, the trolls have a very clever way of ensuring victory that even if the case goes to trial – they file the case in courts that have a record of being friendly towards these trolls like the courts in the Eastern District of Texas.

This is what patent trolls do to innovation.

This is what patent trolls do to innovation.

The Role of Legislation in Reining in Trolls

If Congress had passed laws that could have made filing a patent lawsuit harder, it would have severely impacted the way these trolls work. The latest effort at making a comprehensive law would have seen legislation come into effect decrying that the loser in a patent lawsuit cover the winner’s fees. NPEs would also have been required to be more specific about their lawsuits detailing clearly the terms of the ‘infringement’ on which the lawsuit was filed.

Patent lawyers say that such strict rules would have made it much harder for trolls to survive and launch new lawsuits which they are currently doing at an alarming frequency. The bill which had these laws was passed by a strong majority in the House, but came apart at the Senate level (because the liberals that control the Senate do not care for innovation and to help the private sector work better). The Senate is now focusing on passing the TROL Act which patent lawyers and industry insiders say is a much watered down version of the previous bill. Look like the trolls will still be able to make hay while the lawmakers debate some more over the passing of relevant laws.

Google – apparently donating money to the Democrats has backfired.