Trolls (non-practicing entities bent on licensing to anything that moves) often object to their nickname. But, the term is surprisingly accurate. Troll derives from “troller” a French hunting term meaning to “lead or drag somebody about” as a commercial rather than recreational activity.1
The Old Norse version of the word refers to creatures of mischief and wickedness.2
So, how does one fight one of these nefarious entities bent on dragging legitimate businesses through the court system for financial gain?
Although even a troll’s patents are given a presumption of validity, it isn’t all good news for them. Recent changes to the U.S. Patent Law, via the America Invents Act, provide new avenues for challenging both pending applications as well as issued patents. These options may help rein in a troll’s stable of patents. Also, patent trolls may no longer join multiple alleged infringers simply for infringing the same patent.3
Outside of the new legislation, you may be able to recoup your losses via an indemnification provision from the third party supplier who either sold or installed the system for you. A preliminary analysis may save many dollars compared to caving into a troll’s licensing scheme if a) an “easy kill” exists to avoid their patent claims, b) prior art surfaces to offer an invalidity argument, and/or c) a better understanding of the patent claims helps you tailor which aspects of your system are questionable as a way of limiting the royalty base. Trolls do not want fighters so a little push back can go a long way.
Alternatively, an easy workaround may exist – this solution is particularly helpful where actual notice is required to begin the clock for damages. Finally, trolls like to advertise their list of licensees, as they pursue their next target. So, a willingness to be included in such a list may give you some bargaining power in bringing down the fees that the troll wishes to charge.
For more information on fighting patent trolls, please contact Ria Farrell Schalnat, Jim Kipling, Josh Lorentz, John Luken or Rachael Rodman.
35 USC 299(b): [A]ccused infringers may not be joined in one action as defendants or counterclaim defendants, or have their actions consolidated for trial, based solely on allegations that they each have infringed the patent or patents in suit.