Recent Patent Troll Developments

July 25, 2013, 4:11 PM

The well-known problems posed by patent trolls also commonly referred to as non-practicing entities (NPEs) or patent assertion entities (PAEs) have recently prompted responses beyond the moans and groans of targeted companies who receive their patent infringement demand letters. In addition to the White Houses announcement in early June of a number of executive actions and legislative proposals, several bills have been introduced in Congress this year and another will likely be introduced soon, to curb and/or discourage patent troll activities. Additionally, the federal trade commission recently announced its intention to undertake an investigation of the NPE/PAE industry, and at least one state legislature (Vermonts) has enacted legislation to deal with parties making bad faith patent infringement assertions and demands. It remains to be seen whether these initiatives will achieve their goal of removing the impediment to technological advancement that patent trolls are perceived to be. But certainly we will be hearing more about all of this in the near future.

One interesting development that may be a precursor of others to follow is an emerging NPE/PAE business model under which the emphasis is on sale of blanket license rights in patent portfolios in specific technology areas, in lieu of demands for unreasonably priced licenses on individual patents and accompanying threats of litigation. Could this be an indicator that the NPE/PAE industry will respond to these legislative and other pressures by evolving from one of evil trolls to one of kinder and gentler ogres? Only time will tell. -Robert E. Smartschan