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Patent troll

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Patent troll

  2. 2. PRINCIPLE OF PATENT LAW “ A Patent Not Only Prevents The Imitation Of The Patentee’s Technology But Also Limits The Ability Of Inventors To Develop And Market Their Own Technologies.”
  3. 3. DEFINITION “ A patent troll is somebody who tries to make a lot of money off a patent that they are not practicing and have no intention of practicing and in most cases never practiced.”
  4. 4. WHO/WHAT? <ul><li>A person or entity </li></ul><ul><li>Acquires ownership of a patent </li></ul><ul><li>Without the intention of actually using it to produce a product </li></ul><ul><li>“ nonproducing entity”, “nonpracticing entity”, “Patent Shark” </li></ul><ul><li>Buyers as well as sellers </li></ul>
  5. 5. THEY DO? <ul><li>Procure patents </li></ul><ul><li>Licenses the technology </li></ul><ul><li>Identifies the ingringers-Sues an entity </li></ul><ul><li>Only enforce patents against the alleged infringers </li></ul><ul><li>Interested in exclusion right; not in the underlying knowledge. </li></ul><ul><li>Only concern is of the damages or settlement payment </li></ul>
  6. 6. THEY DON’T DO? <ul><li>Manufacture products </li></ul><ul><li>Commercialize the process </li></ul><ul><li>Transfer the technology </li></ul><ul><li>* * * </li></ul><ul><li>Though the inventions are not copied, but developed independently, patent suits can be brought </li></ul>
  7. 7. WHO ARE NOT? <ul><li>University holding patents: Though non practicing entities </li></ul><ul><li>Individual Inventors who licenses his invention to others for commercialize </li></ul>
  8. 8. THREE STRATEGIES <ul><li>Injunction based strategy: Under legal threat of an injunction - seeks a favorable settlement </li></ul><ul><li>Damages based strategy: damages awarded by the court for infringement </li></ul><ul><li>Switching-cost based strategy: exploits the high cost for switching to a non-infringing technology </li></ul>
  9. 9. WHO HELPS? <ul><li>Inefficiency in the patent system </li></ul><ul><li>- Excessive damages </li></ul><ul><li>- Patentee friendly injunction </li></ul><ul><li>- Generous granting of patents </li></ul><ul><li>- Disclosure – not practice that grant </li></ul><ul><li>monopoly </li></ul>
  10. 10. TROLL PATENT ? <ul><li>Is owned by someone that does not practice the invention </li></ul><ul><li>Is infringed by, and asserted against, non-copiers exclusively </li></ul><ul><li>Has no licensees practicing the particular patented invention except for defendants) </li></ul><ul><li>Is asserted against a large industry </li></ul>
  11. 11. TROLLS AND INJUNCTION <ul><li>General rule: “courts will issue permanent injunctions against patent infringement absent exceptional circumstances” </li></ul><ul><li>eBay Inc. v. MercExchange, L.L.C ., US Supreme Court rejected this general rule. </li></ul><ul><li>Reason: “An industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining licensing fees.” </li></ul>
  12. 12. TROLLS & DAMAGES <ul><li>Patent Troll v. Apple </li></ul><ul><li>NTP- Patent – wireless </li></ul><ul><li>e mail technology – files suit – </li></ul><ul><li>unfairly using their technology – in 2006 – similar suit – Research in Motion – paid $612 million to NTP – does not produce or offer any wireless e mail software services. </li></ul>
  13. 13. Thank You