The term “patent troll” has more than one definition. Basically, it is a person or company that enforces a patent in a court of law that they are not currently practicing. This means that a person who owns the patent sues other companies for using the technology protected by the patent. In order for this person to be considered a patent troll, he has to be considered to be defending the patent very aggressively.
A person will be called a patent troll, a pejorative name, when he has purchased the patent with the intention of aggressively defending it in a court of law. This happens when someone purchases the patent from a bankrupt company, for example, that has been forced to sell its patents due to its financial difficulties. The patent troll discovers who has been profiting from the technology that came from the bankrupt company’s patents, and these are the companies that the patent troll sets his sights on.
The other part of the definition of being a patent troll means that the person who purchased the patent may or may not have had the intention of ever using it. In other words, the patent troll does not necessarily have to take advantage of the patent that was purchased in order to make products and make a profit from it. The main purpose of purchasing the patent was to be able to have a reason to sue other companies and share in the profits that they have made from the technology. This fact makes the patent troll a despised entity in the business world.
Other people who may be considered to be patent trolls are in companies that enforce their patents, but do not perform any research of their own. They do not have research and development departments in their firms, because they are not going to manufacture any products or services based on the patent. They are seen as people who are taking advantage of the companies that are researching the technology and developing new innovations.
If a company has been created with the sole purpose of enforcing its patent rights against other companies, it is said to be a patent troll. In the business world, patent troll lawsuits are considered to be frivolous along the lines of suing McDonald’s after having been burned by the hot coffee. Those companies on the receiving end of these lawsuits often choose to settle out of court, because it would cost them a lot more to defend themselves than to agree to pay hundreds of thousands of dollars. Otherwise, they may have millions of dollars in legal fees to contend with whether they win or not. Anyone referred to as a patent troll, is not someone well respected in the business community.
Patent reform in the US, as represented by the America Invents Act stands to change the playing field quite significantly.
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