The Rise of the Patent Troll
A non practicing entity is a person or company that enforces its patents against one or more alleged infringers, people who use a design or idea owned by another, often with no intention to manufacture or market the product in any way. These individual people or companies are often criticized for being unethical in their practice. Patent owners can cost mega companies hundreds of millions of dollars, and completely crush smaller companies. These people and or companies are referred to as “patent trolls” Patent trolls are defined by one who purchases a patent, often from a bankrupt firm or individual inventor, and then sues another company by claiming that one of its products infringes on the purchased patent. In most cases the “trolls” enforce patents but have no manufacturing or research base or ability to even produce the product in question. These companies entire model of business focuses its efforts solely on enforcing patent rights, thus their only source of income is via legal settlements. 40% of all patent litigation is from patent trolls in 2011, up from 27% in 2007 with 62% of cases being software related. Software is the most highly profitable method of patent trolling, as well as the easiest to argue a case for, as just a concept or idea that has no design whatsoever can be patented. To compare, only 6% of all cases in the US are related to mechanical designs. Almost all of these cases come from only 14 parties. These groups amass close to $10 billion in damages to defendants annually, and have only been snowballing, as more and more people need to use a critical piece of software or hardware as technology advances, that 1 person may hold the rights to. Patent trolling grossly reduces growth and innovation in many fields, with the obvious leading field being technology. The thought of potentially being sued for the entirety of your companies worth scares companies away from investing in something that may be...
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