Dealing With The Nightmare Of Patent Trolls

For the young entrepreneurs, amongst many other business problems is the threat of patent trolls, which is surprisingly rising in United States currently. There trolls are actually those active group of companies, which are on a constant look-out for the entrepreneurs who can be threatened in the name of a law breach. These companies have so far made a devastating profit out of the businesses online.

These troll cases have been reported to have committed the crime using breach of patent, that they claimed from the business owners as a compensation. The legal documents which they forward as the threat initiation for filing the lawsuit are generally very vague. The new entrepreneurs are an easy prey to this. Here is a little insight to this prevalent crime and the steps to secure the start-up against these threats.

Dealing With The Nightmare Of Patent Trolls

How do the Patent Trolls Operate?

These are a few companies who have bought the patents with a malicious purpose. These companies generally buy the dormant patents from the past, and never use those to make a product of their own. Instead, these patents are used to sue the other companies of breaching their rights. Most f the times, the business owners fall prey to this in an attempt to avoid the legal proceedings. They settle and pay for the compensation to these trolls.

The registered patents are in general so broad and vague, that those hardly refer to a specific invention. Using these patents to claim the infringement from thousands of companies at a time is the main business of these patent trolls.

In the past, in void of such a business, the U.S. Patent and Trademark Office had not been very attentive to the details of the patent. Those patents where there is a scope of ambiguity and the language refers to a broader level of spectrum are chosen as the weapon. There is hardly a way to have an eye on those out of millions of such patents lying idle.

The Harm to the Start-Ups

Other than creating an unwanted stir and consuming most of the start-ups precious time in handling such claims, there are two major roadblocks to company’s growth:

The start-ups generally have limited funds in the initial stages. The claims from the patent trolls force the companies to invest their capital in legal and litigation fees. Many small businesses struggle to carry on with their businesses, while looking for a way to mitigate this problem. It even goes to the extent where the financial crisis gets deeper and a new business shuts down.

The threat from the patent trolls also keeps the company from getting involved into any further innovation. The broader perspective of the infringement claims apply to usually everything that they think of. This leaves them with no choice but to ground the idea.

How to Deal with the Patent Trolls?

There is not much answer to this at present. The experts advice the companies to spare the resources in case such a legal claim hits them. This is not to pay the undeserved licensing fees to the trolls, but to pay the legal fees in fighting the case till the very end. Other than that, the start-ups are advised to secure their intellectual properties by buying the licences of their own. This grants them more security and compensation in case a false infringement sues them.

The U.S Patent and Trademark Office is making parallel attempts in refining their technology, which can deal with the fine details of the newer patents coming in. The forthcoming patent documents are likely going to be more specific and detailed in the near future.

Evans is associated with GroupChesterField. He has written several articles on Chesterfield Offshore in BVI.