Assignment 7A: Introduction to Patent Trolls

The term "patent troll" is, of course, not an official one. It is used to describe people or companies that use patents not as a tool to defend their own works, but as one to attack other entities. Officially called a patent holding company (PHC), patent assertion entity (PAE), or non-practicing entity (NPE), a patent troll can obtain patents through two ways:

1. Buying them at patent auctions where bankrupt companies often try to liquidate assets
2. Prove that the troll company itself had the idea first

After acquiring the target patents, trolls engage in lawsuits against companies that infringe on the patents. In addition to this, trolls can also just present infringing companies with the threat of a lawsuit. This forces the infringing companies to stop production in fear that a lawsuit could steal everything.

According to Business Insider, the biggest patent troll in 2012 was Intellectual Ventures. This company holds anywhere between 10,000 to 60,000 patents, depending on whom you ask. Not much is known about this company, other than the fact that it holds hundreds of subsidiaries to carry thousands of patents.

As you can tell, patent trolls are extremely powerful organizations, holding the power to make or break other companies. However, they are not invincible. Take for example, Beneficial Innovations' case against media giants including Google, which is what I will discuss in my next post!