What is a “Patent Troll”?
The term “patent troll” is a pejorative used to refer to a person or entity that acquires patent rights primarily to enforce them against others through licensing demands or litigation rather than to develop, manufacture, or commercialize any underlying technology. Notably, these persons/entities often target companies with claims of infringement, seeking settlements that are lower than the cost of defending a lawsuit but high enough to generate profit. Here, our Florida patent litigation attorney explains what the term “patent troll” actually means.
Know the Neutral Term: Patent Assertion Entities (PAEs)
Patent troll is a common term. Though, as noted, it carries a negative connotation. In formal legal settings, the neutral term is patent assertion entity (PAE). As explained by the Federal Trade Commission (FTC), a PAE is an entity that acquires and enforces patent rights but does not practice the patented invention. The classification focuses on conduct rather than motive. This is important because not all PAEs operate in the same way. Some entities aggregate patents to license them efficiently across an industry while others pursue enforcement through litigation. The key to the classification is that the entity’s main activity is assertion of rights rather than production of goods or services.
Understanding the Lawful Exercise of Patent Rights
Patent enforcement is a lawful activity. A patent grants the right to exclude others from making, using, or selling the claimed invention. Notably, that right includes the ability to license or litigate. A PAE relies on the exact same laws, statutes, rules, and regulations as any other operating company, including the one that developed the patented products/services. Courts evaluate infringement claims based on the scope of the patent claims and the accused product or process. If infringement is proven, any patent holder may obtain damages or injunctive relief.
What to Know About the Business Model and Litigation Strategy of Most Patent Trolls
Patent trolls typically acquire patents from inventors, distressed companies, or portfolios that are no longer in active use. From there, they will generally then identify potential infringers and assert claims through demand letters or lawsuits. The economic model often accounts for the cost of defense in patent litigation. Defendants may choose to settle if the expected cost of litigation exceeds the proposed license fee. Some PAEs pursue high-volume assertion campaigns, while others focus on a smaller number of high-value patents. The strategy depends on the strength of the claims, the target industry, and the available remedies.
Is there a Defense Against a Patent Troll?
Yes. Businesses have several viable defenses against an aggressive patent assertion. The threshold defense is non-infringement. If the accused product does not meet each claim limitation, liability fails. A defendant can also challenge validity based on prior art, lack of novelty, or obviousness. Administrative review before the Patent Trial and Appeal Board can invalidate weak patents. Procedural defenses matter as well. An experienced Florida patent infringement lawyer can help you determine the best defense strategy in your case.
Set Up a Confidential Consultation Florida Patent Litigation Lawyer
At Perkins Law – Brand Protection, our Florida patent litigation lawyers put clients first. If you have any questions or concerns about a patent law case, please do not hesitate to contact us today for a strictly confidential initial consultation. Our firm provides patent litigation services throughout South Florida, including in Miami-Dade County, Broward County, and Palm Beach County.
Source:
ftc.gov/policy/studies/patent-assertion-entities-pae-study
