Patent trolling is an activity in which companies (also called non-practicing entities, or NPEs, because patent trolling is their only activity) buy up patents merely for the purposes of extracting licensing fees from companies using the patents’ technologies. NPE’s main business is to gather dormant patents, threaten infringement lawsuits against supposed violators and then offer to settle for less than the target’s probable cost of mounting a defense. They then file lawsuits or, even worse, merely threaten to do so unless they are paid off. These lawsuits are not restricted to IT companies or technology giants. This has impacted businesses at all levels.
Dedicated efforts to pass legislation protecting companies against so-called patent trolls was recently declared dead, when the bill was removed from the Senate Judiciary Committee’s agenda.
“Unfortunately, there has been no agreement on how to combat the scourge of patent trolls on our economy without burdening the companies and universities who rely on the patent system every day to protect their inventions,” Senator Patrick J. Leahy, the Vermont Democrat who leads the Judiciary Committee, said in a statement.
Motorola sued Apple for patent infringement in 2010. Apple sued back. Since then, the two had been battling over patents in nearly two dozen lawsuits in the United States and Europe.
Universities and medical companies, which often have big patent portfolios, feared the new law would make it hard for them to defend their intellectual property.
The effort to write a new patent law began only two years after President Obama signed into law the America Invents Act, a sweeping overhaul of the patent system enacted in 2011.
That law prevented patent holders from lumping together into a single docket a lawsuit against multiple companies — a provision aimed at trolls. The result, however, was the opposite of what had been intended; it caused the number of patent lawsuits to soar.
Where do we go next with Patent reforms ?