Patent Trolls

If you’ve got a big idea that’s going to make you rich, you had better have your attorney check to make sure your great idea isn’t someone else’s great idea. That’s a routine patient search. To add to the task of securing a patent, a company that has no intention of making or marking your invention might hold the patent to your idea and is waiting to sue you for patent infringement.

Popularly called “patent trolls,” the Federal Trade Commission (FTC) has vowed to study “Patent Assertion Entities” (PAEs).  In a September 27, 2013 news release, the FTC defined PAEs as “…firms with a business model based primarily on purchasing patents and then attempting to generate revenue by asserting the intellectual property against persons who are already practicing the patient technologies.”  FTC Chairwoman Edith Ramirez said, “Patents are key to innovation and competition, so it’s important for us to get a better understanding of how PAEs operate. We want to use our 6(b) authority to expand the empirical picture on the costs and benefits of PAE activity.  What we learn will support informed policy decisions.”

According to PatentFreedom, an online membership organization of companies and law firms patent lawsuits by Non-practicing entities (NPEs) have increased on an average of 25 percent over the last decade. (PatentFreedom, Litigations Over Time).  Their research shows that large corporations are frequently the victims of NPE patent lawsuits.

In PatentFreedom’s “Most Pursued Companies” list from 2009 to June 30, 2013, Apple had 171 NPE lawsuits followed by Hewlett Packard with a total of 137 in that same period.

According to the U.S. Patent and Trademark Office at patent:

“A patent is an intellectual property right granted by the Government of the United States of America to an inventor “to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a limited time in exchange for public disclosure of the invention when the patent is granted.” (Patents, uspto.gov)

The Economic Impact of Patient Trolls, BU School of Law This is a podcast from Boston University School of law. It provides a good explanation of the patent troll business.

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