How to Combat Intellectual Property Trolls: Insights on Patent and Copyright Issues

Editor’s Note: We’re happy to present the following guest blog, courtesy of DePaul University Law Professor  Anthony G. Volini.

IP disputes have a multibillion dollar annual impact on the U.S. economy, affecting companies large and small. This briefly explores a basic question of when is an IP plaintiff a “troll” and discusses some common strategies in IP disputes.

So, what’s a troll anyway?

Troll is a subjective term. Some folks might broadly characterize a patent troll as someone suing for patent infringement who is not actually making and selling the invention himself (i.e., often called a non-practicing entity/NPE). But, it’s not that simple! For example, if Thomas Edison patented some brilliant new light bulb design and saw someone else selling his invention, we would probably not refer to Edison as a troll for enforcing his patent rights even if he were not making and selling the invention.  

What about an NPE enforcing patent rights on some technologically uninspiring patent who is solely in the business of buying and asserting patents? In such instances, there may be differing views of whether that NPE is a troll. Of course, if you’re the one being sued, you’re more likely to call the plaintiff a troll!

Over the years, I have encountered vague software patents where the invention sounds like it broadly protects acquiring data, changing it, sending it somewhere else, etc. (e.g., a claim that seems to cover just about any computer technology!). Some NPEs might jump on buying this type of patent because it can confuse defendants on what the invention is. A plaintiff might attempt to capitalize on that confusion, relying on the fact that many defendants can’t afford to hire a law firm to figure out what the invention is or is not and then defend the suit. Therefore, many defendants would rather quickly settle than embark on this costly journey.

Regarding patent troll status, it’s a matter of perception whether a particular plaintiff seems like a troll or someone who is enforcing legitimate IP rights. It’s probably unfair to refer to all NPEs as trolls.   

A “troll” is probably a subset of “NPE.” One other main distinction between trolls and other NPEs could also potentially be that trolls generally do not engage in additional research, advancing some field of technology. Universities are another good example of NPEs that people might feel uncomfortable labeling “troll,” as they continue to engage in research and generate additional IP.

So, what’s a copyright troll?

A copyright troll is typically a movie owner who sues large numbers of defendants for unauthorized BitTorrent downloads and who uses unfair or seemingly unethical litigation tactics.  His sole evidence is that a defendant’s IP address was used in the alleged download.  In some past cases, plaintiffs essentially blackmailed individual defendants into settling out of fear that their names might be published in a federal suit where the alleged download was a porn movie.  Some cases have involved fairly shady plaintiffs who seeded the bittorrent sites with their movies in the hopes that people would then download the movie, enabling the plaintiffs to sue.  In one case, a court found that the plaintiff had seeded the movie and that one of the copyright owners was a convicted felon. The judge referred the case to the U.S. Attorney’s office to investigate criminal conduct.

In theory, a BitTorrent plaintiff could be legitimately enforcing rights to a valuable movie to deter unauthorized downloads. However, I wonder if requiring ISPs to suspend accounts would be a more practical deterrent than filing federal lawsuits against individuals, many of whom are innocent? I’m curious if courts will ever embrace a theory that an IP address alone is an insufficient allegation to sue for one alleged copyright infringement when balanced against the potential for abusive suits.

Some copyright plaintiffs don’t want to pursue the suit past the complaint filing (i.e., the complaint is essentially a bluff). Instead, they see how many defendants can be quickly pressured into settling. They might back away from a defendant willing to put up a good fight and focus their efforts entirely on those they can quickly settle with. Sometimes a particular plaintiff is analogized to a criminal out trolling the streets for easy prey who avoids a large man, who might put up a fight, and instead targets a weaker elderly person.

Do Patent NPEs always start off with filing a complaint?

Being served with a complaint isn’t always the first step in patent licensing discussions. Some NPEs may not have the resources to actually pursue litigation, and putting a troll-esque patent before a district court creates a huge risk of invalidation and tanking the rest of the troll’s campaign. Eligibility under § 101 is usually fought over early on in the case. To the extent a company receives a pre-suit notice letter, the other option is to ignore the claim completely.  

This is actually one option the USPTO suggests (in a trademark context): https://www.uspto.gov/trademark/i-received-letter. However, assuming the letter constitutes sufficient notice of possible infringement, this could expose the company to potential willfulness damages, so it’s best to consult your attorney whether to completely ignore the claim or take other steps!

Defense Strategies

You and your attorney can gauge whether and to what extent the particular plaintiff wants to fight versus moving on to another target.   

Will it help to publicize the suit?

Many defendants hope that publishing a plaintiff’s identity, and the perceived unfairness of the suit, will scare the perceived troll into the shadows and stop his evil deeds. However, this is often not the case. When a plaintiff rolls up his sleeves to pick a fight, he is often expecting, and prepared for, bad press.

Team up with other defendants?

Various sites suggest teaming up with other defendants to share legal costs and share information. This seems like a good idea if you can make it work!

Settle the patent suit?

In addition to assessing whether and to what extent the plaintiff is willing to fight you versus merely bluffing, there’s certainly an economic analysis to consider: the cost of settlement versus legal expense and your time and energy to defend the suit.  

Use the Patent Office to bypass litigation?

Your attorney may be able to challenge a patent’s validity in the patent office, perhaps through an IPR (Inter Partes Review) which can be cheaper and faster than litigation in federal court.

One other benefit to filing IPRs while facing a district court action is that frequently the district court action is stayed while the IPR runs its course.  

The patent office PTAB kill rate in IPRs seems very high. An October 2016 patent office report noted that out of 145 completed cases, 118 of those cases had a finding that all claims were unpatentable. See page 11 of the report.

Are you reselling a product or making it yourself?

In some cases, a supplier may be responsible for indemnifying and defending the suit for a product you are merely reselling. (In many states, sale of a product automatically carries with it an implied warranty of non-infringement unless expressly disclaimed.)

Want to learn more?

As of this writing, I noticed this site, which addresses a variety of patent defenses with some good detail.

*This article is for informational purposes and does not constitute legal advice. Views expressed herein are Volini’s and are not made on behalf of DePaul University.

Updated: January 2019