Patent Trolls: The Complete Guide

We have one-time IBM patent lawyer Peter Detkin to thank for the phrase “patent troll.”

In Detkin’s time, the phrase almost always referred to the practice of buying low-value patents for the purpose of threatening nuisance litigation.

The easiest way to define the phrase for today’s world is to say that it refers to any person or group that uses patent law outside of its intended purpose.

More specific definitions exist, but it’s best to start with a broad understanding before moving into the details of the trade.

Patent trolls, or as some may refer to them, patent abusers, are individuals or institutions without a genuine financial stake as a patent owner, yet aggressively pursue infringement claims.

Instead of using patents as a basis for creativity or for the production of a valuable good or service, patent abusers use these them to rack up licensing fees.

According to a 2014 study by the group Patent Freedom, patent lawsuits of this type have increased by an average of 22% per year since 2004.

This practice is similar to corporate squatting.

How common is it? In the same study from above, Patent Freedom estimates that 40% of all lawsuits in the industry this year will be put forward by people exploiting patent law.

The proliferation of vague patents and the ambiguity of their language have become a significant tool for those aiming to exploit the system for profits, often at the expense of genuine innovators and economic growth.

The problem is so bad, start-ups are forced to put together their own patent portfolios (however flimsy the claim) to attempt some defense against future infringement lawsuits.

Below is my complete guide to the various abusive patent practices currently used.

The impact on American innovation is profound, with billions of dollars diverted into legal costs and away from research, development, and economic contributions.

DISCLAIMER: This content is for educational purposes only. For me, it’s a form of entertainment. I am not a patent lawyer (I am a trademark attorney) but I happen to find the subject of patent law interesting. Since I’ve learned a lot about the subject from personal research, I figured I’d be good at putting together a general guide. Nothing in this article should be taken as legal advice, and I do not vouch for the accuracy of any information found at the sites I link to.

What Is a Patent Troll?

Like any buzzword or catchphrase, not every definition of “patent troll” agrees.

Rather than depend on a dictionary definition, you can understand the practices of patent abusers by simply reading about what it is they do. Observe their behaviour for yourself and you don’t have to take anyone else’s definition for granted.

The links here describe the modern practice of abusive patent law. I’ve tried to include a few different perspectives here, with a couple of dissenting voices below that defend the practice as a legitimate business strategy. If you read through this list of links in sequence, you’ll get a great sense of the role these activities play in everything from patent law to Net Neutrality with some absurd stops along the way. I hope that you’ll have a full understanding of the concept of patent abuse after reading through these helpful links.

Investopedia: The Concept of the Patent Troll.

The Economist: Patent Trolls, Why No One Likes Them

The American Enterprise Institute: The Paradox of Patent Assertion Entities

NY Times: Has Patent, Will Sue (An Alert to Corporate America)

How to Become a Patent Troll

VICE: Trolling the Patent Troll Myth

Forbes: Not So Scary After All; in Defense of Patent Trolls

Patent Abuse History

Though the popular phrase describing patent abuse has only been with us since the early 1990s, the practice of it is nothing new. The reason you’re just now hearing about it is pretty simple – the Internet. Not only does the Web make it easier to disseminate complex business concepts, but it’s also driven up interest in privacy and other hot-button issues. It’s much easier to create a movement when you’ve got Facebook and Twitter at your fingertips.

The links below will lead you to information on the practice of patent abuse, specifically details showing that people have been at this since the earliest days of patents. I’ve tried to include multiple perspectives here, as with the rest of the article, to maintain some sense of balanced reporting. If you’re at all interested in the American legal system or anything in the business world, you’ll enjoy these articles.

Legal Research Site Names 2,000 Patent Trolls

Fortune: When Patent Trolls were Simply Sharks Thomas Edison was a ‘Patent Troll’

The Man They Call ‘The Patent Troll’

BusinessInsider: Tech’s 8 Most Fearsome ‘Patent Trolls’

How Patent Trolling Works

It’s one thing to understand what the definition of the phrase is, understanding how the process works is a bit harder. That’s partially because of the complex nature of patent abuse, and partially because the practice exists in many different forms. It doesn’t help that it is in the best interest of patent abusers to hide their tactics. I want to help you cut through that smokescreen by showing how they actually go about the business.

I think understanding how the process works is crucial for those who want to put an end to the process. But I suppose some of the information in the links below could also be used to teach someone how to start their own patent-trolling process. I hope that’s not the case, but in the interest of providing a complete guide, I’ve tried to include a variety of voices on the subject.

How Patent Trolls Really Work

Fortune: How Apple Lost $533 Million to an Eighth-Grade Dropout Patent Troll

Boston Globe: Who Is a Patent Troll?

Harvard Business School: Dragging Patent Trolls Into the Light

The House of Trolls in Marshall, Texas

Problems with Patent Abuse

Patent applicants face a daunting challenge, navigating through a landscape where vague language and broad claims can make the difference between approval and rejection, all while trying to protect their innovations and secure their place in a competitive market.

The business model employed by patent trolls not only stifles innovation but also drains resources that could otherwise fuel technology advancements and economic growth.

As the defendants in these cases, small businesses and even larger corporations find themselves at a disadvantage, forced to allocate substantial resources to fight off baseless infringement claims.

The need for thorough reviews of patent applications has never been greater, to prevent the issuance of vague patents that can be weaponized against real innovators.

Ultimately, the battle against patent trolls is not just about protecting profits but about safeguarding the future of American innovation and ensuring that economic growth is driven by genuine advancements in technology, not hindered by predatory legal practices.

Famous Patent Abuse Incidents

As these practices became more widely known, cases involving patent abuse started to appear in headlines and popular web-based news stories more often. The immediate result was increased awareness about the problem. An unfortunate result was a slight case of fatigue. Too many stories appeared in too short a time for the public to stay interested.

Even so, these high-profile patent abuse stories had a big impact on the practice. They may have made people a bit numb to the idea of patent reform, but billion-dollar settlements and corporate alignments are always going to be of interest to the federal government. The links here go to famous stories about patent abuse. You can learn a lot about the practice by reading about how famous cases of it in the past have played out. Take note – not all of the examples are explicitly about “patent trolls,” but are all relevant to contemporary patent law.

Time: Apple and Google Call a Truce in Patent Wars

The Real History of the GUI

CNN Money: RIM, NTP settle for $612 million

c|net: Supreme Court Rules against Microsoft in i4i Patent Case

Dangers of Abusive Patent Practices

So what’s the big deal with this type of patent law practice? Why is it such a bad thing? After all, some of the links above defend the practice. I’ll admit that sometimes the line between legitimate patent practice and outright patent abuse can be very fine. You may also think that you aren’t affected by this kind of behavior. Maybe you own a small business or work for a big corporation and can’t see how patent abuse affects you directly.

If this type of behavior seems like something that only affects big corporations, read on. I’ve included the links below to show the practice’s potential for harm. I’ve tried to steer clear of scare tactics, but even so, the potential for danger seems too great to ignore, at least in my opinion. Here are examples of how this practice is affecting American business and innovation.

Are Patent Trolls Smothering Innovation?

Scientific American: Case Studies Reveal that Patents Can Hinder Genetic Research

Popular Mechanics: Patent Trolls, How Bad Is the Problem?

Forbes: Voicing Both Sides of the Patent Troll Debate Yes, Patent Trolls Are Hurting Your Business

Examining the Effects of Patent Troll Legislation on Start-Ups Patent Trolls Threaten Small Businesses

Patent Abuse and US Law

As a legal professional, when I first heard about the concept of patent infringement abuse, I was naturally curious about what the law had to say about it. Patent law is closely related to trademark law, which is my field. With all the developments in the past two or three years, it’s been the perfect time for me to get interested in patent abuse. The US government is finally paying attention to the issue and is beginning to actually do something to stop patent abusers in their tracks.

I’ve included a variety of links on legal approaches to the problem, including some legal defenses of the activity. The legal climate regarding patent trolls has changed a great deal in just the past couple of years. If you want to get up-to-date on the latest news about patent abuse, the links below should give you a complete education.

Patent Misuse: Exploring the Basics

Washington Post: There Are Two Patent Troll Problems

Wall Street Journal: A Patent Troll Bill with Bad College Grades

Case Studies in Patent Abuse

I consider case studies to be one of the best sources of unbiased information, and I think that fact is borne out here. You’ll read plenty about bad behavior on the part of patent abusers, but you should also get a new perspective on exactly what kind of abuses we’re talking about. I’d like to say that patent trolls don’t live up to the bad reputation they’ve earned, but for the most part that’s not the case here.

I’ve come across some very interesting patent abuse cases during my years of interest in the subject. Here are links to some particularly interesting cases. Included are details on both sides of the argument over the improper use of patents by non-practicing entities.

Ericsson and Unwired Planet: A One-Stop Shop for Outlining Patent Abuse

How to Deal with a Patent Troll

Not everyone reading this will have to deal with a real patent abuse case directly during their lifetime. As I said, this post is for entertainment and educational purposes. But just in case you are reading this to prepare for your own fight, I wanted to include some links from experts on what you can do to prevent being targeted for patent trolling.

I also think the links below are educational, even for those who aren’t going toe-to-toe with this problem themselves. I learned a lot about how this practice works by reading these links, and I think that kind of education is important for everyone learning about US patent law abuse.

TechCrunch: I Beat a Patent Troll and So Can You

White House Offers New Web Tools to Help Fight Patent Trolls

Conversant: Spotting a Patent Troll, a Seven-Step Guide

Taming the Patent Troll

The Future of Patent-Trolling

A few years ago, I would have written something very dark in this space. I would have told you that patent abuse was likely to continue for years, that there was nothing much we could do about the problem, and that it was unlikely that their behavior would be regulated or addressed by the government at all. Thankfully, that’s not the case anymore.

As the federal government starts to show interest in shutting down patent abuse, it should be no surprise that patent trolls are developing new ways of gaming the system. What does the future of patent abuse look like? The links below are a collection of answers to that question.

ArsTechnica: First Patent Troll Ordered to Pay Extraordinary Case Fees

The Atlantic: What the Courts Did to Curb Patent Trolling – For Now History will Remember Obama as the Great Slayer of Patent Trolls

This Year’s Fight for the Tech Industry: Patent Trolls

What Can You Do to Help?

If I’ve done my job right, by the time you’ve read this far you’re just as upset about these practices as I am. But there’s good news, as we saw in the last category.

If you want to help end the patent-trolling phenomenon, you’ve already taken the first step by educating yourself. To continue the fight, check out the links below. Some go to further reading, some suggest actions everyone can take to combat the practice. They’re all powerful tools we can use to take back the patent system from those who abuse it.

Students and Researchers, Take a Stand Against Patent Trolls

Eugene Kaspersky: Ten Tips for Fighting Patent Trolls It’s Time to Kill Patent Trolls for Good

Ever since President Clinton signed the Digital Millennium Copyright Act in 1998, the federal government has slowly been moving toward direct action on patent abuse.

It’s a good thing that the United States government is beginning to address intellectual property laws, and we have the Internet to thank for this development.

A major debate exists today between those on the side of patent trolls and those who see them as a plague on small business and innovation. Those who defend the practice point out that the industries that engage in the most “patent abuse” are responsible for 2/5ths of the American GDP. They suggest that evidence showing a negative impact on the economy from the practice is either misguided or a blatant fabrication.

Regardless of which side of the debate is winning, it’s clear that American patent law is moving away from the draconian rules that once dominated the corporate landscape.

Patent reform is the new name of the game.

Most recently, President Obama and his cabinet took significant steps to curtail the activities of patent abusers.

But, as President Obama admitted himself, though the government has made some progress on the topic, their job is only half-complete.

So long as the federal court system continues its broad interpretation of proposed and existing patent reform legislation, those who abuse the patent system are in danger of losing their grip on the courtrooms and boardrooms of the United States.


Xavier Morales, Esq.

About the Author:

Xavier Morales, Esq.

Mr. Morales founded this trademark law practice in January 2007 with the goal of providing intellectual property expertise to entrepreneurs and businesses around the country. Since then, he has filed more than 6,000 trademarks with the USPTO. You can learn more about Xavier here.

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