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Patent Trolls: Frivolous Patent Lawsuits on the Rise Since 2018

By Dick Weisinger

Patent Trolls are businesses or individuals that acquire a war chest of of patents with no intention of ever using the patent other than to demand money from companies that they claim infringe on the methods described in the patent. Often the patents acquired are of low-quality or those that have been granted for ideas for things that are well known or commonly used.

Patent trolls frequently offer no service and make no products themselves. Their sole purpose is to make money by demanding businesses found to infringe on the patent details pay a usage fee. Many companies pay the requested fees to settle the case and avoid even potentially higher frivolous lawsuit expenses in attempts to dismiss the case.

In 2012, the US passed the Leahy-Smith America Invents Act that had the goal of eliminating or greatly reducing the amount of frivolous patent cases. The law had initial success and made litication less profitable and less common. But in 2018 that changed when the US Patent and Trademark Office changed their interpretation of the rules and began to deny many petitions made against weak patent claims.

Since 2018, patent troll suits are up 42 percent based on information by Unified Patents and reported by Engine.

James Bessen, economist at Boston University, wrote in Harvard Business Review that “a consistent picture is emerging about the effects of patent litigation: it costs innovators money; many innovators and venture capitalists report that it significantly impacts their businesses; innovators respond by investing less in R&D and venture capitalists respond by investing less in startups.”

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