Today’s companies face a business reality rarely encountered by their predecessors: “patent trolls.” There is much debate over what constitutes a patent troll, but by most definitions, patent trolls are patent owners that do not make or sell patented inventions, and instead enforce their patents through infringement lawsuits to generate revenue in the form of license fees gained through settlements or jury awards. These companies, also sometimes less pejoratively referred to as “patent-holding companies” or “non-practicing entities” (NPEs), with business models centered on litigation rather than competition, are unsavory to many. But some “trolls” were once operating companies in their markets, and now seek to monetize their intellectual assets. Under any name, patent trolls have become a prominent fixture on today’s intellectual property landscape. While every case is unique, Quinn Emanuel’s extensive experience litigating against patent trolls has revealed effective defense strategies.
Proactively Responding to a Troll’s Initial Demand
Patent trolls often fire the first shot with a letter “inviting” a potentially infringing company to consider paying for a license. The opening salvo in any form should be taken seriously and responded to thoughtfully. Ignoring the letter is ill-advised, as a judge or jury will likely hear how the defendant was put on notice of its infringement, but couldn’t be bothered to respond. A better practice is to respond directly, affirming one’s respect for intellectual property rights and commitment to innovation, and requesting more information. Asking a troll to identify infringing products, to explain element-by-element why it believes there is an infringement, and to provide prior licenses to its patents will aid a defendant’s analysis and may provide some free discovery not otherwise available until litigation ensues. It may also buy some time to begin preparing one’s case. If the troll refuses to respond, this could give rise to an estoppel defense. In our experience, trolls who are not fully invested in their causes will simply go away when faced with a response that shows commitment to defending the case.
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