Just saying the term in certain circles evokes a collective cringe.
"Patent trolls," or non-practicing entities who hold onto patents solely for the purpose of suing anyone who dares to create something that even slightly violates them, take advantage of what many agree is a broken patent system. They not only stifle innovation; they sit back and profit off the roadblocks to innovation that they created.
And they’re successful. In 2011, patent trolls cost the U.S. economy an estimated $29 billion, according to Boston University researchers. If that number sounds alarming, consider that a previous study also conducted by BU academics estimated the total cost of patent troll litigation and fees since 1990 at $500 billion.
It’s one of the most frustrating parts of the modern-day business world, made even more depressing because it's long seemed like it wasn't going to change.The typical legal activists, such as the Electronic Frontier Foundation, have spoken out for years, calling for change to the patent system. For whatever reason, these efforts have largely fallen short.
But some new hope has emerged as the result of a particularly bold new patent troll lawsuit.
Personal Audio, a company that has not sold a product in 15 years, filed for Patent 8,112,504 B2 in February 2012. Then, in January 2013, the company filed suit against the creators of popular podcasts the Adam Carolla Show and Stuff You Should Know, claiming that the creation of podcasts violates Personal Audio’s patent. On this premise, Personal Audio could theoretically force anyone runnning a podcast to pay them for the right to do so. It’s a shakedown, plain and simple.
The podcasters do have the option to fight, but, as this Boing Boing article explains very well, most podcasters lack the money to cover even the legal fees, let alone the payments they’ll likely be required make as a result of the ruling:
The podcasters that get these letters have 3 options.
1. Ignore the letters and hope for the best.
2. Contact the troll and agree to pay a license fee for the patent (even though the podcasters don't use the technology covered by the patent).
3. Fight the troll in court.
Well actually there is a 4th option -- shut down the podcast and delete all files and hope they go away. But even if podcasters do that the patent trolls could still try to extort money retroactively. But at least podcasters would not be out more money. Sadly many may choose this option.
Regarding option 3: If someone does fight the troll and wins - all that means is the winner does not have to pay the license fee to the patent troll. However the "winner" is still out all the lawyers [sic] fees they spent to fight a bogus patent.
But Personal Audio, whose 15-year patent troll career includes an $8 million win against Apple in 2011, seems to have set off a chain of events that could arm businesses for the fight against patent trolls.
The main advantage of the patent troll is the legal process itself. When faced with a lawsuit claiming patent infringement, the accused entity tends to settle with the patent holder just to make the problem go away. Sure, they could go to court, but nothing guarantees they’ll win, and even if they do, they will spend potentially years and millions of dollars just to clear their names. In the meantime, their competitors will have edged them out, and the fight will have actually been a detriment, regardless of the ruling.