Concept of Patent Troll 

Introduction

The concept of Patent Trolling arose out of Patents only, which is governed by The Patents Act of 1970. The patent in India was created to promote creativity and invention, which ultimately benefits the general population and the Patentee himself. In today’s world, Patent Trolling is increasing, and it is important to understand the concept correctly.

What is a Patent Troll?

A Patent Troll, also known as a non-practising entity, is a business or individual who purchases patents from bankrupt or financially precarious organizations in order to profit by levying licensing costs against patent violators.

After purchasing the patents, the Patent Trolls frequently have no intention of making or selling the items; instead, they just wish to profit from accusations of Infringement.

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Types of Patent Trolls in India

In India, several types of patent trolls can be identified:

1. Litigation Trolls: These entities primarily focus on filing lawsuits against companies for patent infringement. Their goal is to secure financial settlements or court-ordered damages, often exploiting the high cost of legal defence to coerce settlements.
2. Licensing Trolls: Instead of going directly to litigation, these trolls seek to generate revenue through aggressive licensing campaigns. They acquire patents and then demand licensing fees from companies, often threatening legal action if the fees are not paid.
3. Shell Company Trolls: These trolls create or use shell companies to obscure their true identity and assets. This strategy makes it difficult for targeted companies to counter-sue or negotiate effectively, as the shell companies typically have no other assets or business operations.
4. Portfolio Aggregators: These entities accumulate large portfolios of patents through acquisitions, often buying patents from struggling companies or individual inventors. They leverage the sheer volume of patents to pressure companies into broad licensing agreements.
5. Patent Assertion Entities (PAEs): PAEs specialize in acquiring patents specifically to assert them against alleged infringers. They do not produce products or services but exist solely to enforce patent rights and extract settlements or licensing fees.
6. Hybrid Trolls: These trolls engage in a mix of litigation, licensing, and portfolio aggregation. They are versatile in their approach, adapting their strategies to maximize financial gain from the patents they control.

By understanding these different types of patent trolls, businesses can better prepare for and defend against potential trolling activities in India.

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Law Governing Patent Troll

• Prior to the passage of the Patents (Amendment) Act of 2005, which clearly led to a drop in trolling activities, Patent Trolling was quite prevalent in India’s information technology and communications industries.
• It would be important to highlight that the Indian patent law just poses a danger to Patent Trolls’ existence rather than outright forbids their existence. 
• For instance, a granted patent must be utilized in India in accordance with Indian patent rules. 
• Conversely, compulsory licensing may be triggered if a patent is not developed or used in the Indian Territory for three years. 
• In addition, the Indian Patents Act mandates that a statement of a patent’s functioning be filed at the conclusion of each fiscal year. 
• Additionally, if the patent owner were unable to submit such a declaration, he may be required to pay a fee or face imprisonment.

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How does Patent Troll Operates

• The troll’s principal business involves purchasing patents from failing businesses and subsequently exploiting them as legal threats.
• Anyone who violates one of the trolls’ patents will be threatened. If the infringer doesn’t pay a license fee, which often costs a fortune, the trolls may pursue legal action.
• The majority of the time, the Infringement allegations are untrue, and no laws pertaining to patents are broken.
• The legal actions that the Patent Trolls bring against patent violators are sometimes exceedingly expensive. As a result, most infringers would rather pay the license charge than risk being sued.

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Ways for protection against the Patent Troll

• Thoroughly do your search, as nowadays, internet searches may be used to find out what previous art is available for the technologies and business processes that you employ. 
• Become a member of a group organization that focuses on defending against Patent Trolls.
• Keep in touch and follow the advice of an intellectual property lawyer at all times.
• If your ideas, products, and content aren’t already patented, make sure they are at least going through the patent approval process.
• Since the primary goal of trolling is to generate revenue, the trolling firm does not want to be in the public eye. So, exposing patent troll companies can discourage them.
  

Some examples of Patent Troll

1. Samsung India and Spice Mobiles vs. Somasundaram Ram Kumar– The patentee, in this instance, was labelled a “Patent Troll” since he not only took advantage of the judicial system by upholding dubious patents but also wasn’t making use of them. Because Samsung and Spice Mobiles included elements that were covered by the patentee’s patents in their mobile phones, the patentee, in this case, filed a lawsuit against them for patent Infringement.
   
   The defendants, on the other hand, argued that the claimed characteristics did not constitute a technological advance beyond the state of the art, claiming a lack of novelty and inventive steps. In light of this, the Intellectual Property Appellate Board (“IPAB”) decided in the defendant’s favour and cancelled the contested patent.
2. The patent troll is a big issue not only in India but also in the US. Some examples in the US are: Regarding a claim of patent infringement, Apple paid Network-1 Technologies $25 million in a settlement. A $625 million lawsuit involving the same invention was the subject of the same patent just a few years prior to Network-1 Technologies purchasing the patent.
3. One such instance is the well-known Patent Troll Martin Kelly Jones, who, instead of suing Fortune 500 corporations for alleged patent infringement, issued demand letters to hundreds of tiny businesses in the United States.
4. Netflix Patent Troll-Netflix recently unveiled a new download function called “CD-Rs by mail,” for which Blackbird Technologies filed a patent lawsuit against Netflix. Based on a patent application submitted in 2000, Netflix’s download function has been sued. Numerous “Methods and systems of digital data duplication” are covered by more than 362 of their patents. For instance, a lawsuit against DIRECTV recently reached a settlement. Black Bird Technology, a firm that only owns patents, is the owner of the “CD-Rs by mail” patent. The company’s main goal is to file a lawsuit and force the firms to pay a settlement.

Conclusion

Everyone appears to agree on the straightforward reasoning that everyone has a right to defend their patents. Patent Trolls are an issue that many businesses and individuals suffer from, who suffer losses that might take years to recover from and perhaps put them out of business. They need to be protected against such Patent Trolls; that is why even the legal system restricts Patent Trolls. To learn more about patent trolls, consult a patent lawyer here. 

Frequently Asked Questions

Patent Trolls in India: 10 FAQs

Q1. What is a Patent Troll?

Ans1. A Patent Troll is a business or individual who acquires patents, often from financially troubled companies. They don’t use the inventions themselves but sue others for alleged patent infringement to collect licensing fees.

Q2. How prevalent are Patent Trolls in India?

Ans2. While once a bigger issue in India’s tech sector, Patent Trolling activity has decreased since the Patents (Amendment) Act of 2005.

Q3. How does Indian Patent Law address Patent Trolls?

Ans3. Indian Patent Law discourages Patent Trolling through:

• Working Requirement: Patented inventions must be commercially worked in India.
• Compulsory Licensing: Patents not worked for 3 years can be subject to compulsory licensing, allowing others to use the invention.
• Annual Working Statements: Patent owners must file yearly statements on working the invention.

Q4. How do Patent Trolls typically operate?

Ans4. Patent Trolls acquire patents and threaten lawsuits for alleged infringement, often against innocent companies. These lawsuits can be expensive to defend, even if the claims are weak.

Q5. How can I protect myself from Patent Trolls?

Ans5. Here are some ways to protect yourself from Patent Trolls:

• Conduct thorough prior art searches to understand existing patents in your field.
• Join industry groups focused on defending against Patent Trolls.
• Consult with an intellectual property lawyer for specific advice.
• Consider patenting your own inventions to strengthen your position.
• Expose Patent Troll activity to public scrutiny and discourage them.

Q6. Can you give an example of a Patent Troll case in India?

Ans6. Yes. In Samsung and Spice Mobiles vs. Somasundaram Ram Kumar, the patentee sued these companies for mobile phone features but wasn’t actively using the technology themself. The patentee was accused of being a Patent Troll, and the patent was ultimately revoked.

Q7. Are Patent Trolls a problem outside India?

Ans7. Yes, Patent Trolls are a global issue. Examples include:

• Apple’s $25 million settlement with Network-1 Technologies in the US over a patent infringement claim.
• Martin Kelly Jones, a US Patent Troll who targeted small businesses with infringement lawsuits.
• Blackbird Technologies suing Netflix over a “download by mail” feature based on a patent application.

Q8. Why are Patent Trolls a problem?

Ans8. Patent Trolls can stifle innovation by forcing companies to spend resources defending lawsuits instead of developing new products.

Q9. What can be done to address Patent Trolls?

Ans9. Several potential solutions exist:

• Stronger laws requiring proof of actual harm from alleged infringement.
• Faster and cheaper ways to invalidate weak patents.
• Increased public awareness of Patent Troll tactics.

Q10. Where can I find more information about Patent Trolls?

Ans10. Consult with a company lawyer specializing in intellectual property law. They can provide specific guidance based on your situation.