A patent troll, also called a patent assertion entity (PAE), is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question, thus engaging in economic rent-seeking. Related, less pejorative terms include patent holding company (PHC) and non-practicing entity (NPE). Generally not considered patent trolls are NPEs such as individual inventors, university research laboratories, development firms that offer their patented technologies to licensees in advance, and licensing agents that offer enforcement and negotiation services on behalf of patent owners.
Patent trolling has been less of a problem in Europe than in the U.S. because Europe has a loser pays costs regime. In contrast, the U.S. generally used the so-called American rule, providing that each party is responsible for paying its own attorney’s fees, until U.S. Supreme Court decided Octane Fitness, LLC v. ICON Health & Fitness, Inc. on April 29, 2014.
They are real. They are active. They are out there to make trouble for everyone!
So you have a new product idea and everyone under the sun is telling you to go get a patent. MUWHAHAHHA. Have fun.
Let’s first start with some patent data from 2012, then we’ll go from there. To be continued…