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Joined: Mar 31, 2005
Messages: 19
Location: IP.com
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patent troll (PAT.unt trohl) n. A company that purchases a patent, often from a bankrupt firm, and then sues another company by claiming that one of its products infringes on the purchased patent. adj. patent trolling pp.
These patent system bottom feeders have now become so common that Intel has coined a term to describe them: "patent trolls ." Several problems contribute to making this "patent troll" business model a simple and effective source of illegitimate profit irrespective of the quality of the patent. For example, if the troll can claim that the patent covers $5 billion in annual revenue, that troll will ask for a royalty fee of a few percentage points of revenue; e.g., $150 million per year. While that may seem to be an absurd amount to pay to someone who bought a patent out of bankruptcy for less than one hundred thousand dollars, the troll will threaten the legitimate business with a permanent injunction at the end of the patent case, threatening the halt of the sale of a critical product or closing down a production facility. Even if the chance of the troll winning is low, the troll's costs are modest, normally a few million dollars at most. In contrast, the legitimate business the troll targeted faces potential financial ruin if it can no longer sell a key product. Intel recently faced such a troll who wanted $8 billion and a permanent injunction after purchasing the patent for $50,000.
—David M. Simon, "Patent processing improvements," Federal Document Clearing House Congressional Testimony, July 24, 2003
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Anonymous
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If the patent is valid and someone buys it then they may press their
claim.
For you to assert that this is illegitimate undermines the entire patent
system which is based on ownership of intellectual property.
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Anonymous
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I don't quite see it that way. While the trolling practice is legal, it goes against the productive purpose of patents - i.e. to protect the rights of the inventor. The "troll" didn't invent anything, and furthermore, has zero interest in competing in the marketplace. They have no interest in the invention, per se, except as the engine of a business model that seeks revenue for its own sake.
The troll has no productive purpose in society, and in fact will financially impact competitors. It is true that for it to impact, there must be some alleged and probably actual infringement. The "problem" is that these acts of "infringement" harm no other competitive entity whatsoever.
The concept of patent trolls reminds me somewhat of the predatory law firms that operate on the basis of shareholder lawsuits (like Lerach in San Diego). No doubt they have some valid basis some of the time, but I have seen enough of their operation to conclude that much of what they do is damaging to society, benefitting litigation attorneys above all else.
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Anonymous
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Patent trolls serve an essential function in innovation by increasing the liquidity of intellectual property. see http://en.wikipedia.org/wiki/Patent_troll
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Anonymous
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Furthermore, patent trolling may help struggling business which own patents that might be being infringed -- if a third party arrives prior to bankrupcy and conducts a survey of potential infringers, that company might be able to generate revenue from their intellectual property and recovery from their financial situation.
Intellectual property isn't somehow different from tangible property, just because it's thought-stuff. It takes time and money to develop intellectual property and it deserves to be protected.
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