Patent Trolls Case Study

A Study in Business Law of Patent Trolls

March 12, 2014

“‘Oh, the story of a troll kind of fits ‘cause the whole Billy Goats Gruff thing, it’s someone lying under a bridge they didn’t build, demanding payment from anyone who passed. I said, ‘How about a patent troll?’”
Peter Detkin
Counsel for Intel

It’s a story every child knows: The poor three Billy Goats Gruff that just want to cross the bridge. The evil troll that blocks their way and demands a stiff toll before letting them pass. The final justice that prevails when the biggest and oldest Billy Goat Gruff pushes the troll off the bridge. But aside from childhood bedtime stories, do these evil “trolls” really exist in today’s world, impacting the financial
None of these companies (including RIM) paid notice or took a license. NTP then brought an infringement suit against RIM in District Court. The jury found the NTP patents valid and RIM was found to have infringed them. In addition to $33 million for damages, the judge ordered RIM to pay an additional $20 million in punitive damages (since their infringement was “willful”) and issued an injunction that would have shut down the entire US BlackBerry system. Further litigation ensued, and eventually RIM was forced to settle with NTP to the tune of $612.5 million.

At the crux of the issue was the patent criterion of “prior art;” even though RIM had no notion of Campana’s inventions and patents until after they had developed the Blackberry technology, NTP had obtained such vaguely worded patents that they could be deemed to cover parts of software used in the Blackberry device. Furthermore, although too late to help Blackberry, it was discovered that “a few months after the November, 2002 ruling, during a reexamination of the NTP patents, the USPTO found that there existed
MercExchange LLC to patent holding companies centered on their ability to successfully gain (or at least have real power to threaten) injunctions against the companies they were suing. The Supreme Court heard an appeal by eBay’s appeal of an injunction granted to MercExchange by the CAFC. The background on this case began when eBay sought to license the patent for an electronic exchange from MerExchange, who owned the patent, and was refused. MercExchange sued eBay for infringement, and won damages in District Court of $35 million. However, following the jury verdict, MercExchange had their motion for a permanent injunction denied. The CACF then reversed that ruling, stating that courts will issue permanent injunctions against patent infringement as a “general