Patent troll

[5] In contrast, the US generally employs the American rule, under which each party is responsible for paying its own attorney's fees.

[7][8] The origin of the term patent troll has also been variously attributed to Anne Gundelfinger, or Peter Detkin, both counsel for Intel, during the late 1990s.

[26] In quoting that research, media outlets such as The Washington Post labelled all non-practicing entities as patent trolls.

Saying "they don't actually produce anything themselves, they're just trying to essentially leverage and hijack somebody else's idea and see if they can extort some money out of them," the President ordered the USPTO to require companies to be more specific about exactly what their patent covers and how it is being infringed.

[34] The Administration further stated the USPTO will tighten scrutiny of patent claims that appear overly broad, and will aim to curb patent-infringement lawsuits against consumers and small-business owners using off-the-shelf technology.

[35][36] David Kravets said "[t]he history ebooks will remember the 44th president for setting off a chain of reforms that made predatory patent lawsuits a virtual memory.

"[37] In the US Congress, Senator Orrin Hatch (R-Utah) sponsored legislation in 2013 intended to reduce the incidence of patent trolling.

[38] In February 2014, Apple Inc. filed two amicus briefs for cases pending in the US Supreme Court, claiming to be the #1 target for patent trolls, having faced nearly 100 lawsuits in the preceding three years.

[39] In November 2014, the US Federal Trade Commission (FTC) settled its first consumer-protection lawsuit against a company, for using "deceptive sales claims and phony legal threats".

The Vermont law prohibits bad faith infringement threats, with bad faith indicated by: lack of specificity of the alleged infringement, settlement demands or damage claims that include excessive licensing fees, and unreasonably short deadlines for payment of demanded monies.

[18] Because the costs and risks are high, defendants may settle even non-meritorious suits they consider frivolous for several hundred thousand dollars.

[56] A July 2014 PricewaterhouseCoopers study concluded that non-practicing entities (NPEs) accounted for 67 percent of all patent lawsuits filed—up from 28 percent five years earlier—and though the median monetary award size has shrunk over time, the median number of awards to NPEs was three times higher than those of practicing companies.

[59] A GAO study concluded that the proportion of patent lawsuits initiated by trolls hadn't changed significantly from 2007 through 2011, the GAO speculating that the raw numerical increase in both troll and non-troll instituted lawsuits may be due to the "inherently imprecise" language and a lack of common, standardized, scientific vocabulary in constantly evolving emerging technologies such as software.

The report further stated: "Specific policies should focus on fostering clearer patents with a high standard of novelty and non-obviousness, reducing disparity in the costs of litigation for patent owners and technology users, and increasing the adaptability of the innovation system to challenges posed by new technologies and new business models, would likely have a similar effect today.

[65][66] In an interview conducted in 2011, former US federal judge Paul R. Michel regarded "the 'problem' [of non-practicing entities, the so-called "patent trolls"] to be greatly exaggerated."

[68] Similarly, New York Times columnist Joe Nocera wrote that legislation on patent reforms considered by the United States Congress that are "allegedly aimed at trolls" often instead "effectively tilt the playing field even further towards big companies with large lobby budget".

They monitor the market for possibly infringing technologies by watching popular products, news coverage and analysis.

[32] However, the Supreme Court of the United States ruled in a unanimous May 2017 decision in TC Heartland LLC v. Kraft Foods Group Brands LLC that patent litigation cases must be heard in the state which the defendant is incorporated, shutting down this option for plaintiffs.

[48] If it wins, the plaintiff is entitled as damages an award of at least a "reasonable" royalty determined according to the norms of the field of the patented invention.

Writing in Forbes about the impact of this case on patent trolls, writer Jessica Holzer concludes: "The high court's decision deals a blow to patent trolls, which are notorious for using the threat of permanent injunction to extort hefty fees in licensing negotiations as well as huge settlements from companies they have accused of infringing.

Often, those settlements can be far greater than the value of the infringing technology: Recall the $612.5 million that Canada's Research in Motion forked over to patent-holding company NTP, Inc., to avoid the shutting down of its popular BlackBerry service.

[74] Using the justice system to make money gives patent trolls a financial advantage because patent troll plaintiffs are typically immune from defense strategies large business employ against legitimate smaller patent plaintiffs (e.g., litigation costs are significantly higher for the defendant or infringer than for a purported damaged plaintiff who has a "no recovery, no fee" contingency-fee lawyer; until recently trolls had an almost-unrestricted ability to choose plaintiff-friendly forums, frequently the Eastern District of Texas).

[76] A Google-led initiative, LOT Network, was formed in 2014 to combat PAEs by cross-licensing patents that fall into the hands of enforcers.