There are companies that develop or manufacture nothing, but earn millions by just suing other companies. Learn more about patent trolls in this article.

Apple Vs VirtnetX

Apple patent war with a Texas based company called VirtnetX is famous. In one of the court proceedings in February 2016, Apple was asked to pay USD 625 million to VirtnetX because former was found of infringing four of latter’s patents. Apple is defending the case and a retrial is reported. VirtnetX also did sue many companies like Microsoft, Cisco etc in the past and got big amounts as settlements or fines.

Even though patent litigations are common and big amounts are being imposed as damages for patent infringement, this particular case of VirtnetX become buzzing in media discussions in relation with discussions on patent trolls. VirtnetX is accused by many media as a patent troll.

What is a patent troll?

A patent troll is a pejorative term used to describe individuals or companies that use patents as business strategy rather than coming out with any products. Patent trolls buy patents from inventors, universities etc and use these patents to sue companies that supposed to use the patented technologies or even similar technologies. Many times the companies will be unaware of the patents or the technology will be far related to the patents.

Settle it!

But patent litigations are very costly. So the companies try to settle down the case by paying the patent trolls a settlement amount. Usually the settlement amount will be huge. For example, Microsoft settled a patent infringement issue with the VirtnetX for about USD 200 million.

This is how patent trolls finds revenue. They don’t manufacture any products or develops any software, rather they search for companies that can be accused of patent infringements for the patents they hold. Patent trolls are patent owners that wait to trap a company later, without doing any business operation related to the patent. Patent trolls constantly check the market for possibly infringing technology by studying product, going through advertisements, browsing through company websites, analyzing tech media etc.

Who fears them?

Even though the term “patent troll” is not used as specific technology term, many companies including big giants fear the so called patent trolls. Other related terms to patent trolls include patent holding company or non-practicing company, which are only identified as a patent troll with respect to their action with patents owned by them.

 Usually a patent troll never tries to realize their patents, but rather works on strategies to attack a practicing company. But there are some companies, who might have tried to realize their patents but failed, and sue against a company which may implement the technology in the future. Such a case is not usually tied to a patent troll.

Patent Trolls, a nightmare

For inventors and companies, a patent troll is a nightmare. Trolls oozes out hard earned revenues from companies, just because of some strategic failures from their side. It is therefore better to plan early and move strategically to defend any patent troll before a company is coming out with a product.

Be Careful!

The case of patent trolls should be studied with great care and caution before a product is introduced into the market. Before coming out with a product, companies should learn patents that are related to the technology. This action will protect from not only patent trolls, but also from legitimate companies.

Carefully analyze patent law suits related to patent trolls that happened in the past or that is still going on. If possible learn both parties’ arguments and court verdicts. This may help to formulate your strategy to prevent any troll attacks once you come out with the product.

 If possible, try to buy patents that are similar to your technology. Usually buying such patents will be much easier and less costly than warring with patent trolls in the court or settling with them. The patents that are bought by the trolls will be from individuals, universities, bankrupt companies etc, this makes the patents cheaper.

Troll cases are found to be increasing, especially in the US. Patent litigations by trolls account for a large percentage of the patent trials. So beware, and take necessary steps before introducing an invention into the market. Patent trolls will be waiting to trap you.

References to Apple-VirtnetX patent War

http://arstechnica.com/tech-policy/2016/02/jury-apple-must-pay-626-million-to-patent-troll-virnetx/

Apple Ordered To Pay $625M To Patent Troll In FaceTime Lawsuit

http://fortune.com/2015/02/27/how-apple-lost-533-million-to-an-8th-grade-dropout-patent-troll/

https://www.engadget.com/2016/08/02/apple-wont-have-to-pay-a-patent-troll-625-million-after-all/

http://fortune.com/2016/10/02/apple-loses-patent-to-virentx/

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