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Intellectual Property Trolls

Patent law reform has recently moved to the forefront of the federal legislation calendar as the country calls on Congress to protect inventors and consumers from intellectual property trolls (“IP trolls”). IP trolls may also be known as patent assertion entities. These IP trolls include individuals or entities that do not necessarily generate innovations themselves, but rather buy and hold patents, copyrights, or trademarks. Then, the IP trolls instigate infringement litigation against parties who use the otherwise idle intellectual property. Are you in litigation against an IP troll for alleged infringement? Do you have a non-active patent that may interest IP trolls? At the Law Offices of Salar Atrizadeh, an attorney with experience and knowledge in intellectual property law and infringement litigation can help you understand your legal rights and remedies.

What Are the Negative Effects of Intellectual Property Trolls?

IP trolls target idle intellectual property and file lawsuits, which the majority of consumers find to be frivolous and unjustified (i.e. lacking any merit or good-faith cause to sue). Recently, President Obama signed the America Invents Act (“AIA”) into law in an effort to protect against such frivolous litigation. The AIA is the first attempt by the federal government to curtail intellectual property claims by such IP trolls. For example, the AIA requires that IP trolls file individual actions for infringement, rather than a single action against multiple defendants. This requirement will substantially increase the cost of litigation for IP trolls, and, perhaps hinder them entirely. Indeed, some cases may reach extremely high litigation costs. For example, MPHJ Technology Investments, LLC, a Texas-based patent-licensing company, recently sued consumers for scanning any document to send by email. MPHJ sent consumers letters demanding $1,200 to cover the cost of wrongfully scanning documents, which they claim to be a patented process calling for royalties (i.e., payments to the patent holder for using the patented technology). Otherwise, MPHJ threatened the consumers with litigation. A complaint filed in a Vermont state court aims to protect consumers from such patent troll litigation in the first lawsuit of this kind.

Are There Any Beneficial Effects of Intellectual Property Trolls?

The underlying premise of the AIA, and all anti-troll efforts, is that all IP troll litigation is frivolous. However, there is some evidence to suggest that IP trolls may actually promote growth in technological sectors. The technology industry is especially important in California, where the economy relies heavily on patents and the underlying innovations. For example, IPNav, a “patent monetization firm,” explains that it stimulates idle patents by buying patents and enforcing them against infringers. According to a recent New York Times article, IPNav generated over $500 million in revenues and cash settlements by pursuing IP troll litigation. In addition to the monetary gain from the litigation, IP trolls also argue that they help protect idle patents from infringement where this protection would not otherwise exist.

At the Law Offices of Salar Atrizadeh, we guide our clients in legal matters regarding all aspects of intellectual property litigation by using extensive knowledge and skills to create innovative solutions to protect your intellectual property rights. Please contact us today to set up a confidential consultation.