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A patent troll is a term assigned to a person or entity that acquires a patent and then uses it in a manner that is harmful to the spirit and intent of the patent system. In general, a patent troll does not intend to sell or endorse the patented product. Rather, the troll purchases large quantities of patents and then sues or demands royalties from companies that are allegedly infringing on patents owned by the troll.
Peter Detkin, a former assistant general counsel at Intel, is credited with popularizing the term “patent troll” in 2001. He used the term to describe companies that were not planning to actually manufacture or market a patented product but that were instead making money by suing alleged product infringers. The term is now also used to describe entities that buy up patented inventions for the purpose of taking licensing fees from alleged infringers rather than for the purpose of actually manufacturing and selling the patented goods.
The practices that patent trolls engage in are thought of in disparaging terms by many industry participants, including a number of software and technology companies. These critics argue that a patent troll inevitably compels a manufacturer to move resources spent on developing new products to defending lawsuits filed by a troll. They also claim that the presence of trolls contributes to an increase in lower quality patents as well as the payment of large licensing fees by manufacturers.
Patent trolls, which are generally privately-held companies, often refer to themselves as patent investors. They claim to be particularly advantageous for an independent inventor, who would not have the capital or means to defend a patent by himself. A typical patent troll spends the majority of company costs on obtaining new patents and on litigation costs.
In order to protect themselves from patent trolls, some companies have proactively developed strategies to help reduce or eliminate contact with a troll. For example, some entities check out which patents are being filed with a patent office on an ongoing basis. Other companies may decide to design their products around products that have already been patented by a troll, which can have the effect of reducing potential licensing charges. Before developing a new product, companies may also take care to conduct thorough searches of pending patent applications and currently patented products to ensure that essential components of their new product are unique.
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