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Welcome to our law firm's December 2012 Newsletter! Please take the time to read the article and contact us should you have any questions or concerns.

 

Law Offices of Salar Atrizadeh

Intellectual Property Trolls and The Threat of "Use-less" Litigation

The growing value of patents and new innovations is a tempting feeding pool for intellectual property trolls (aka "IP or Patent Trolls"). The term "troll" has been used to identify individuals and companies that seek out patent litigation for innovations they have arbitrarily purchased solely to pursue litigation. Often, they have no intention of using the patent rights they fight so vigorously to take away from users.

 

RPX Corporation, a new company in San Francisco, has emerged in an effort to preserve the rights of patent users. RPX buys vulnerable patents and issues licenses for a fixed annual fee. Licensees are then free to access patented innovations, so long as they pledge not to pursue alleged patent infringement litigation. Cisco, a California based innovative company, has commented that RPX's approach provides a "sensible approach" to the threat of growing patent litigation.

 

According to the Federal Trade Commission ("FTC"), patent trolls seek out "vagueness in patent applications" and pursue vigorous litigation based on incomplete definitions of patents and underlying usage rights. Growing patent litigation has alerted Congress to the need for legislation to "stern the practices of patent trolls."

 

Companies that regularly utilize patents can take certain steps to protect themselves from patent litigation. For example, before using any intellectual property, it is essential to check patent databases for the underlying patent. This will notify the company of any suspicious activity or any vagueness in the patent itself that may later turn into costly litigation.

 

Unfortunately, patent trolls often target start-up businesses, and the subsequent litigation is a devastating blow to the small businesses. Faced with the threat of a long and costly litigation battle, these small companies often settle. However, while settling may be the best option for some, it may also help to analyze the underlying patent for "pressure points" that can give way to a less costly solution to litigation. By studying the patent and learning of the related legal implications, these small companies can notify patent trolls that litigation will require a thorough and lengthy showing of actual legal infringement before there can be any reward for damages. Such a strategy goes a long way towards balancing the power of the smaller company with the resources of larger patent troll companies.

 

Legal commentators have suggested that these trolls may in fact benefit the patent market. In The Myth of the Patent Troll: An Alternative View of the Function of Patent Dealers in an Ideal Economy, James F. McDonough III argues that, "patent trolls" weed out poorly issued patents. Forcing the evolution of patents will compel the market to improve and issue more effective patents that are more specifically defined and protected.

 

At the Law Offices of Salar Atrizadeh, we guide our clients in legal matters by using extensive knowledge and skills to create innovative solutions. Please contact us today to set up a confidential consultation.

 

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